Biotechnology is India’s latest pursuit for domain expertise in the knowledge – intensive sectors. The first Indian biotech company in India started in 1989 with the establishment of Bangalore Genie. From there it went up to 300 companies now, a spectacular growth in nearly one and a half decade. Though the Indian biotech industry accounts for only 1.1 percent of total world biotech industry, it is the second largest producer of vaccines in the world.
- Current Market size : $ 2 Billion
- Growth rate: 37%
- Number of Biotech Companies : ~ 300
- R&D Investment of top 5 companies : $ 300 million
- Government of India : doubled research spending from $175 m (1997-2002) to $350m (2002-07)
- Ranking : 3rd in Asia Pacific region (after China and Australia)
- Projection : expected to reach US$ 5 billion mark by the year 2010
DOMESTIC
The domestic business was driven by Biopharma sales. Biopharma accounted for 73.15 percent share of total domestic business of US$623 million. Mahyco-Monsanto, Rasi Seeds, Biocon, Panacea, Shantha Biotechnics, Serum Institute, Venkateshwara Hatcheries, Reliance Life Sciences, Indian Immunologicals, etc. are some of the major Indian players.
SECTORAL GROWTH
- Bio-agricultural - 154 % growth rate
- Biopharma - 30 % (primarily driven by vaccine business)
- Bioservices - 54.6 % growth
- Bioindustries - 34.55%
- Bio informatics - 25 % growth
ADVANTAGE INDIA
- Availability of trained HR – Strong chemistry / strong in NDDS
- Regulatory infrastructure
- Improving standards of bio-manufacturing
- Increasing capacity in clinical development
- Increasing R&D collaborations with US/EU
- Increasing acceptance of Indian Clinical data by USFDA/EMEA
- Quality yet cost leadership
BIO CLUSTERS
- Western region Biocluster - largest in terms of revenues generated - centered on Aurangabad, Ahmedabad, Mumbai, and Pune.
- The Southern cluster is housed in Bangalore, Hyderabad, and Chennai.
- North Cluster is centered around Delhi-Gurgaon- Noida region.
The States have taken initiatives to provide incentives and infrastructural concessions to the Biotech Industry, such as the creation of bio-clusters of scientific and industrial units, biotech parks, fiscal incentives like tax holidays, capital subsidies, energy concessions, biotech development funds, incubators, etc. Biotech Parks are being established and are designed to give all facilities to 100% EOU’s (Export Oriented Units).
INVESTMENT
Government sponsored research is a major component in India with government as the largest investor in the sector. Government allocation to biotechnology trebled from US$ 100 million in 1987-88 to US$ 300 million in the year 1997-98. It further went up to US$ 500 million in 2002-03. Overall investment in biotechnology has more than quadrupled in past five years from Rs. 250 crore in 2000-01 to Rs. 1115 crore in 2004-05.
MANPOWER
- India has large number of English speaking trained individuals.
- Large base of trained, skilled individuals.
- Biotech industry employs nearly 12000 trained individuals in 2004-05, which is almost double compared to 6400 in 2002-03.
- Manpower projections have been made assuming that by 2008-09 India would be in a position to double this figure, i.e., capture 5% of the global market.
POLICIES: Government Initiatives in Biotechnology
As early as 1982, the Indian government set up the National Biotechnology Development Board (NBDB) as an apex body to set up priorities and long term plan for research and development in this area. In 1986, this became a full fledged government department – the Department of Biotechnology (DBT).
INTELLECTUAL PROPERTY PROTECTION
Under the Trade Related Intellectual Property Regime (TRIPs) agreement India has implemented patent protection on pharmaceutical and biotechnology products in 2005.
INCENTIVES FOR BIOTEHNOLOGY INDUSTRY
The government has adopted a pro-biotech policy and offered several incentives to the Biotech Industry. Some of the incentives are listed below:
- 100% foreign equity is allowed in the manufacture of all drugs except recombinant DNA products and cell targeted therapies
- All biotechnology projects exceeding a Foreign Direct Investment (FDI) of US$ 22 million, under the Foreign Investment Implementation Category (FIIC) are handled by the DBT’s Fast Track Committee.
- There is a depreciation allowance on plant and machinery
- Customs duty is exempted on goods imported in certain cases
- Customs and excise duty exempted for recognized Scientific & Research Organizations (SIRO)
- 3 year excise duty waiver on patented products
- Hundred percent rebate on R&D expenditure
- 125 percent rebate for research contracted to publicly funded R&D institutions
- Other fiscal benefits for joint R&D projects
Some more recent incentives announced are exemption of customs and excise duties on drugs and materials brought in or produced for clinical trials, reduction of duties on reference standards imported from 25% to 5%, removal of minimum export obligation of ~ US$4 million, and allowing companies to avail of full customs exemption for up to a quarter of their imports of certain equipment.