India’s biotechnology industry needs to be the bulwark for the nation for the future. It is currently riding a crest of entrepreneurial success and innovation. In the span of eight years, India’s bioeconomy has vaulted from $10 billion to $80 billion. The number of biotech startups has quietly exploded from a paltry 52 in 2014 to a mammoth 5300 plus in 2022. It may surprise people to know that India is the third-largest destination for biotechnology in Asia and one of the top 12 destinations for biotechnology worldwide. With biotechnology emerging as a sunrise sector in India, the country’s rise as a go-to destination for bioinnovation and biomanufacturing is a highly anticipated and sought-after outcome.
A number of enabling factors have induced the monumental expansion of India’s biotech sector. The nation has a robust foundation in the biological sciences and has amassed years of experience and knowledge. The pandemic’s uncertainties have also catalysed the sector’s growth, with priorities now shifting to the prediction of health problems rather than mere prevention. Besides these, burgeoning domestic and worldwide demand, brought on because of initiatives such as Aatmanirbhar Bharat, Make in India, Ayushman Bharat, and Startup India and easy, accessible mass production of vaccines and pharmaceuticals, has spurred momentum in India’s biotechnology industry.
In 2021, India’s biotechnology industry reached $80.12 billion, growing 14% from $70.2 billion in 2020. This means that India’s bioeconomy generated, on average, $219 million daily! Moreover, on average, three biotech startups were incorporated every day in 2021, with a total of 1,128 biotech startups being set up in 2021. Such impressive growth has set the stage for an ambitious target – that is, for the bioeconomy to nearly double its size in three years and reach $150 billion by 2025.
This target may seem difficult to accomplish at first glance but is certainly within reach considering the present growth of the industry. All major segments of the industry, biopharmaceuticals, bio agriculture, bioindustry, and bio IT and bioservices are witnessing spectacular growth. The bioindustrial segment grew 202% in 2021 to $10.27 billion, driven by the government’s decision to focus on renewable energy. To this, biofuels contributed $5.97 billion, which is expected to increase to $20 billion by 2025, again almost tripling in size. With India’s biosimilars gaining a foothold in developed markets such as the US, the biopharma sector is expected to touch $63 billion in 2022, a growth of nearly 1.4X. The bioservices and bio IT sector is predicted to nearly quadruple from $6.4 billion to $26.6 billion in 2025.
Due to the biotech industry’s substantial promise, despite global headwinds, early-stage dealmaking is set to see continued traction. Investment in India’s bioeconomy grew over 400X, reaching ₹4200 crore in 2022 from ₹10 crore in 2014. Venture capital returns in the bioeconomy, in the West, have consistently given more than 7% IRR, better than similar returns in software and services, thus proving that one can do good and earn a better profit at the same time. It is only a matter of time before Indian venture capital firms realise that they are missing the bandwagon and decide to hop in.
Despite the exponential increase in investments, the industry is far from achieving maturity. Investors are hesitant about stepping foot in it, as they are unable to envision an exit path to capital markets. This diffidence is particularly evident in India, where investors prioritise quick and easy profits over long gestation periods and careful development of an impactful product pipeline. Currently, biotech companies cannot list on capital markets in India unless they are revenue positive which is impractical for the ecosystem. Thus, efforts should be made to make Indian capital markets a practical option for such startups which otherwise have to go to markets like Hong Kong, Singapore, and the US to access such capital.It is an understatement to say that the stakeholders of the biotechnology industry have a lot on their plate. Indians are investigating and innovating in many novel and exciting areas: the production of food and materials, medical advancements, the manufacturing of diagnostic and medical devices, alternatives for petrochemical reliance, the development of generics and biosimilars, genetic modification, cell treatments, nanotechnology, and so on. India’s positioning of itself as a center of accessible, inexpensive, and inclusive healthcare has made it one of the top spots for contract manufacturing and clinical trials and the world’s largest producer of vaccines, with it exporting to more than 150 nations.
The integration of technology into the delivery of healthcare is of special interest at the moment, having caused widespread, rapid disruption in the industry. With digital platforms bridging the gap between patients and healthcare providers and personalised medical treatments, there should be a radical improvement in the quality of living of Indians. In particular, research is exploding in fields such as precision medicine, bioprinting of organs and other individualised therapies, ecological engineering, computer–human interfaces, DNA-based data storage, biomanufacturing of materials and devices, on-demand medicine production, and synthetic organisms.
All this promise needs three key ingredients for it to materialise. Firstly, the government needs to continue and accelerate key programs to incentivise innovation. It is important to note that no country in the history of humanity went from developing to developed without sustained investment in basic sciences, which form the bedrock of all innovation. Investment in such science, north of 3% of GDP is the only way to escape the middle-income trap. The industry needs to step up and make the transition from being the generic powerhouse of the world to also becoming the intellectual and resource capital for such advanced technologies. Finally, venture capital and private equity companies should collectively create an ecosystem of effective due diligence, risk mitigation, and fund deployment strategies similar to what we have seen in the IT sector.
I firmly believe that the full potential of India’s biotech sector goes beyond our imagination at this time. Even in the foreseeable future, it is expected to lead to a complete overhaul of the world and daily life. More and more diseases that are currently incurable are going to start becoming curable with the advent of these new technologies and services. This is India’s moment to collectively invest in the sector to leapfrog over the world and truly help democratise healthcare for the world.
The writer is Founder and CEO of Eyestem.
