The Indian biotechnology sector is one of the fastest growing knowledge-based sectors in India and is expected to play a key role in shaping India's rapidly developing economy. Currently, India holds two per cent share of the global market. With numerous comparative advantages in terms of R&D facilities, knowledge, skills, and cost effectiveness, the biotechnology industry in India has immense potential to emerge as a global key player.
The Indian biotech sector’s overall turnover in 2008-09 was US$ 2.51 billion, as compared to US$ 2.13 billion in 2007-08. Bio-pharma contributed US$ 1.6 billion; bio-agri nearly US$ 311.28 million, bio-industrial segment US$ 99.19 million and bio-informatics grew 15 per cent to touch US$ 45.65 million.
According to a report by the Confederation of Indian Industry (CII) and consultancy firm KPMG, the Indian biotechnology sector is likely to become a US$ 5 billion industry by 2010. The report stated, "India is ranked among the top 12 biotech destinations in the world and is the third biggest in Asia-Pacific in terms of the number of biotech companies."
India is also gaining importance as a clinical trial destination. The global clinical research outsourcing market is projected to touch US$ 23 billion by 2011, with consultancy firm KPMG estimating that India will corner 15 per cent of this in two years.
Moreover, according to joint study by FICCI and E&Y, the industry-sponsored Phase II, Phase III clinical trial study sites in India have grown by 116 per cent over the last 15 months with the country moving from rank 18 to 12 across the 60 most active countries.
India participates in 7 per cent of the global Phase III trials and 3.2 per cent in the Phase II trials with industry-sponsored trials.
The Stem Cell Global Foundation, a New Delhi-based organisation promoting stem cell research, estimates the business to be growing at a compounded annual growth of 15 per cent and cross US$ 450 million next year.
Market Size and the Key Opportunity Segments
According to an industry survey, carried out by the Association of Biotech Led Enterprises (ABLE), biotechnology industry in India has notched up a growth of 20 per cent during 2007-08 and the revenues earned were worth US$ 2.56 billion as against US$ 2.1 billion during the previous fiscal. Research services touched US$ 500 million and bio-IT (bioinformatics) was US$ 250 million.
Further, according to the findings, going by the current trend and the new biotech policy of the central government, the sector is poised to generate US$ 13 billion-US$ 16 billion by 2015.
Major investments
Investments, along with outsourcing activities and exports are the key drivers for growth in the biotech sector.
As per the survey carried out by ABLE, 56 per cent of the sector's total revenue of US$ 1.44 billion came from exports. Around 70 per cent of exports were from bio-pharma, and 26 per cent from bio-services segments.
Private equity (PE) investments in the life sciences sector clocked US$ 183 million during the 10-month period between January and October 2008 compared with around US$ 173 million for the same period in 2007.
Some of the major investments in the sector are as follows:
- Biocon Ltd has announced an exclusive collaboration with the US-based generic drugs major Mylan Inc to develop, manufacture, supply and commercialise many high-value generic biologic compounds for the global markets. It has also entered into a strategic tie-up with the US-based Amylin Pharmaceuticals to jointly produce a peptide hybrid molecule for treating diabetes.
- Two US-based biotech companies, Imac and Indus Expression floated by non-resident Indians have planned an investment of US$ 104 million to set up their units in India at the SEZ proposed by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC).
- CRYO-SAVE Group, the Netherlands-based stem cell company with a large Indian presence, plans to increase the number of stem cell donors in the country by opening more representative offices. The company plans to invest US$ 2.66 million in its Bangalore-based subsidiary for over three years. The company is also making India its Asia-Pacific hub. The company plans to serve the entire region stretching up to Australia with its operations based in Bangalore.
- Panacea Biotec Ltd has bagged a three-year contract worth over US$ 119.2 million from Unicef to provide the agency with EasyFive vaccine, a protection against five dreaded pediatric diseases.
- France’s biggest drugmaker Sanofi-Avenits has bought Shantha Biotechnics for US$ 773.8 million.
- Emami Biotech will invest US$ 84.3 million in a jatropha plantation project in Ethiopia over the next six years.
Government Initiatives
The Government of India and the UNESCO fully realising the need of training and education for generating interdisciplinary human resource relevant to biotechnology, took a joint decision to establish the Regional Centre for research, training and education in biotechnology under the auspices of UNESCO. The UNESCO Regional Centre for Biotechnology will come up in Faridabad, Haryana by next year.
Further, the Department of Biotechnology (DBT), Govt of India, has also decided to set up a unique Health Biotech Science Cluster (HBSC) at Faridabad.
The DBT is exploring avenues to fund research, focus on the opportunity of bio-similar products and create infrastructure to scale-up human resources to support a shift to high-end research in the long term.
The Centre is also looking to support innovation from universities and a Bill to empower scientists and help them commercialise their innovations is expected to be passed by the end of the year.
Moreover, the central government is planning to create a separate National Biotechnology Regulatory Authority.
- The Karnataka government is proposing to establish biotech parks in prominent cities to promote the biotechnology sector in the state.
- The APIIC has allotted land to 19 companies so far in the Biotech Park Phase III at Karakpatla, Medak district. Over the next five years, over US$ 2.69 billion is likely to be invested by these companies.
Looking ahead
India is already being globally recognised as a manufacturer of economical, high quality bulk drugs and formulations. With a huge base of talented, skilled and cost competitive manpower, and a well-developed scientific infrastructure, India has great potential to become a leading global player in biotechnology.
Exchange rate used:
1 USD = 48.33 INR (as on July 2009)
1 USD = 48.68 INR (as on August 2009)