India is currently experiencing an astounding surge in its biotechnology sector. What began with a modest 500 startups in 2018 has exploded to over 10,000 by 2025. This incredible growth is backed by a robust network of 94 incubators spread across 25 states, igniting a wave of innovation that’s actively reshaping healthcare and life sciences across the nation.
The Indian government has played a crucial role, launching initiatives like the BioE3 Policy and setting an ambitious goal to achieve a $300-billion bioeconomy by 2030. This strategic vision positions the sector for immense global impact. Leading the charge are established pharmaceutical giants like Serum Institute of India and Bharat Biotech, renowned for their production of affordable vaccines and generic drugs. Alongside them, innovative domestic firms such as MedGenome and Strand Life Sciences are pioneering advancements in precision medicine and cutting-edge diagnostics.
This thriving biotech ecosystem is fueled by robust governmental support, strong investor confidence, and India’s innate competitive advantages. Programs like Startup India, initiatives funded by BIRAC, and production-linked incentives have not only simplified operations but also drawn substantial foreign direct investment, with India allowing 100% FDI in many biotech areas. This progressive approach has firmly established the nation as a global leader in producing generics and vaccines, providing over 60% of the world’s immunisation doses for diseases like DPT, BCG, and measles.
Moving Beyond the Initial Spark
Simultaneously, a new generation of startups is leveraging artificial intelligence (AI) to revolutionize research and development. Innovators like MedGenome are harnessing AI-powered analytics to speed up drug discovery and enhance clinical diagnostics, leading to both reduced costs and improved patient results. This potent blend of cost-effective R&D, a vibrant and youthful talent pool, and swift digital integration has propelled India to the forefront of biotech innovation globally.
Yet, despite these impressive strides, the sector is grappling with considerable hurdles that threaten to slow its growth. While recent headline investments have topped $3 billion over the last two years, accessing capital becomes critically difficult when companies need tens of millions for crucial phase II clinical trials or to construct specialized Good Manufacturing Practice (GMP) facilities.
While some companies, like Inovio and Mylab Discovery Solutions, have successfully cleared early development stages, many others struggle to secure the subsequent funding rounds necessary to expand their operations and compete in global markets.
Imagine a scenario: a hypothetical Mumbai-based healthcare startup, developing an AI platform for early cancer detection, saw its $15 million funding round falter. Investors insisted on extensive, geographically diverse clinical validation. Pursuing pilot studies across both rural and urban areas for regulatory sign-off would ultimately have diluted the company’s value and likely forced a sale to a larger entity, stifling its independent growth potential.
Charting a Strategic Path Forward
Another significant issue is fragmentation within the ecosystem. India boasts over 70 incubators, but very few are equipped with the full range of specialized facilities essential for advanced technologies, such as pilot-scale purification systems, fill-and-finish suites, or comprehensive regulatory affairs support. This forces innovators to move between different cities to complete a single development cycle, leading to redundant investments in expensive equipment, frustrating bureaucratic delays, and a significant waste of valuable scientific talent.
Outdated and complex regulatory processes further impede progress. India’s current frameworks for clinical trials, patent legislation, and product approvals, originally designed for a different era, often cannot keep pace with the rapid advancements in AI-driven innovation and sophisticated biologics. These delays not only push back market entry but also discourage crucial international collaborations and investments.
To navigate these obstacles and unleash the full power of its biotech ecosystem, India must prioritize several strategic actions. First and foremost, the approach needs to be “deep,” not “wide.” Instead of spreading resources thinly across many fragmented incubators, India should concentrate its efforts on developing a few exceptionally strong, integrated clusters.
For example, imagine a “GMP Commons” in locations like Genome Valley or along the Mumbai-Pune corridor. These centers, jointly funded by the government, multinational corporations, and development finance institutions, could centralize costly downstream equipment and specialized services – resources that individual startups simply cannot afford on their own.
Addressing the Talent Gap
Secondly, closing the critical financing gap is essential. A specialized biotechnology fund, mirroring successful digital venture models, could offer matching equity or venture debt to companies that have proven their concepts but aren’t quite ready for market launch. Furthermore, blended-finance structures could attract institutional capital from insurance companies and pension funds, providing partial guarantees to mitigate inherent scientific risks.
Third, creating dedicated late-phase clinical trial hubs would dramatically accelerate product development. For example, a network of specialized centers within India’s All India Institute of Medical Sciences (AIIMS) hospitals could dedicate ward space, advanced imaging suites, and integrated electronic health record systems solely to industry-sponsored clinical trials. Harmonized ethics committees and centralized laboratories could further minimize trial delays, guarantee data integrity, and build confidence with international regulators.
Fourth, tackling talent shortages through a “reverse brain drain” initiative is crucial. Implementing policies such as tax holidays, relocation grants, and soft loans could entice highly skilled post-doctoral scientists to return to India. Additionally, offering specialized micro-credential courses in cutting-edge fields like CRISPR process engineering, GMP data integrity, and AI-driven biostatistics would ensure the workforce remains highly competitive and up-to-date.
Finally, India should adopt a risk-based, context-specific regulatory framework, drawing inspiration from successful international models. Examples include the European Union’s tiered AI Act and the US Food and Drug Administration’s Predetermined Change Control Plans. Such an approach would allow for tailored validations for diverse datasets and algorithm performance, avoiding overly rigid controls that could stifle genuine innovation.
For startups, several promising areas offer significant opportunities to create new value. AI-driven drug design, advanced molecular diagnostics, and innovative digital health platforms are rapidly gaining traction in key innovation hubs like Bangalore and Hyderabad. These technologies are proving especially effective in speeding up drug discovery and enhancing clinical diagnostics. Furthermore, precision genomics and accessible gene therapies, leveraging technologies such as CRISPR, hold immense potential to tackle chronic diseases prevalent in both Indian and global markets.
Concurrently, sustainable agricultural biotechnology presents vast opportunities. Given that 85% of Indian farms are smaller than 2 hectares, startups are implementing precision farming methods to optimize irrigation and pest control. Pioneering companies such as Cropin and Fasal have already showcased how localized AI integration can significantly boost crop yields and reduce input expenses for farmers.
Moreover, India’s well-established expertise in vaccine production, biosimilars, and generics reinforces its position as a major global export hub. Bharat Biotech’s groundbreaking launch of the world’s first intranasal COVID-19 vaccine perfectly illustrates India’s capacity for impactful global innovation. Simultaneously, industry titans like Serum Institute of India and Biocon have set international standards for quality and cost-effectiveness, creating a strong foundation for domestic startups to build upon and develop even higher-value products.
Moving forward, achieving global leadership in biotechnology demands that India intelligently streamline its ecosystem and strategically direct resources towards high-impact areas. This requires a collaborative effort from the government, industry leaders, and academia to consolidate funding, develop integrated infrastructure, and align regulatory standards with the best international practices. By meticulously focusing on these strategic priorities, India can not only sustain its impressive quantitative growth but also achieve groundbreaking qualitative advancements, transforming its biotechnology sector into a global benchmark of excellence in healthcare and life sciences.
Deepakshi Kasat is a scientist at GlaxoSmithKline in California. The opinions shared in this article are solely her own and do not necessarily reflect those of her employer.