India is gradually emerging as a key contributor in the worldwide biotech environment. FDI in biotechnology in India puts the country among the top 12 favorable destinations for foreign direct investment (FDI) globally and makes it the third-largest in the Asia-Pacific region.
It is fast becoming the foremost hub for contract research, clinical trials, and biotech manufacturing. It will be a crucial contributor to India’s goal of becoming a $5 trillion economy by 2024.
Biotech industry classification
The Indian biotech industry can be categorized into five major segments:
- Biopharmaceutical – 62%
- Bio-agriculture – 16%
- Bio-Industrial – 7%
- Bio- services (Bio-IT, CROs, Research services) – 15%
India’s biotechnology sector’s contribution has an estimated 3% share in the global biotech industry. It ranks 48th on the Global Innovation Index and comprises over 5,000 companies with 760 core companies and 4,240 startups.
FDI rules for India’s biotechnology companies
According to the latest FDI policy
- 100% FDI is allowed for greenfield pharma projects under the automatic route.
- Up to 100% FDI is allowed for brownfield pharma projects, with 74% allowed under the automatic route and beyond 74% allowed under the government route.
- 100% is allowed for medical device manufacturing under the automatic route.
Highlights of India’s biotech industry
Some of the distinguished developments in India’s biotechnology sector include
- Poised to become a $150 billion industry by 2025 with a CAGR of 16.4%
- A significant contributor to global vaccine manufacturing and the leading supplier of DPT, BCG, and measles vaccines, along with the provider of 70% of WHO’s vaccines (essential Immunization Schedule)
- More than 4237 biotech startups with the number expected to touch 10,000 by 2025
- Higher contribution to national GDP (from 2.2% in 2019 and 2.7% in 2020)
- One of the first countries to have a dedicated department for the biotech industry.
The Department set up the Biotechnology Industry Research Assistance Council (BIRAC), a non-profit agency with the aim to aid budding biotech companies in research and innovation, taking them from concept to commercialization.
The COVID-19 pandemic and numerous government measures have put the spotlight on the advantages offered by investing in the biotechnology sector.
Benefits offered by the biotech sector
Let’s go through some of the primary merits that biotech investments can produce.
- Early disease diagnosis and advanced treatment therapies – With higher capital, biotech companies can develop new methodologies to detect diseases at the early stage and treatment them using effective and innovative methods.
- Business expansion of small and medium-sized businesses (SMBs) – SMBs are the foremost beneficiaries of foreign investment. FDI helps them cultivate modern technologies to boost their growth and reach across a larger marketplace.
- Pioneering biologically-produced fuels and food production mechanisms – Advancements in biotechnology backed by FDI inflow can help reduce dependence on fossil fuels and solve the hunger problem prevalent in emerging economies.
Biotechnology can improve the standard of living of a country’s populace and is instrumental in the maturation of groundbreaking small and medium-sized businesses.
FDI India supports the collaboration of SMBs and the right foreign investors. Our team facilitates the inflow of FDI in biotechnology in India.
We help Indian business owners analyze the market, develop successful strategies, procure foreign investment and implement the business plan after obtaining all the required government approvals.