India’s biotech growth over the past several years has been nothing short of extraordinary. From a modest count of around 500 startups in 2018, the number is expected to grow to over 10,000 in 2025. This rapid expansion is supported by a network of 94 incubators in 25 states, fostering innovation that is transforming healthcare and life sciences.
Government supported initiatives including bioe3 policy And the ambitious vision of creating a $300 billion bioeconomy by 2030 has set the stage for a region that is poised to become a global power. Established companies like Serum Institute of India and Bharat Biotech have long demonstrated India’s ability to provide affordable vaccines and generics, while home-grown companies like MedGenome and Strand Life Sciences are now making breakthroughs in precision medicine and diagnostics.
Strong government support, investor confidence and inherent competitive advantages are the key factors behind a vibrant biotech ecosystem. Schemes like Startup India, BIRAC-funded initiatives and production-linked incentives have streamlined processes and attracted significant foreign direct investment (as India allows 100% FDI in many biotech sectors). This openness has allowed the country to become a leader in generic and vaccine production, supplying more than 60% of global doses for vaccinations such as DPT, BCG and measles.
after initial phase
Also, startups are adopting artificial intelligence (AI) to revolutionize research and development. Companies like MedGenome are using AI-powered analytics to accelerate drug discovery and refine clinical diagnostics, cutting costs and enhancing patient outcomes. The unique combination of affordable R&D, a diverse and young talent pool and rapid digital integration has placed India at the forefront of biotech innovation.
Despite these achievements, the sector faces significant challenges that prevent this momentum from continuing forward. Although lead investment has reached nearly $3 billion over the past two years, when companies need millions of dollars to conduct Phase II clinical trials or build dedicated good-manufacturing-practice (GMP) facilities, capital is extremely scarce.
While companies like Inovio and MyLab Discovery Solutions have successfully overcome early-stage hurdles, others have found it difficult to raise the additional rounds needed to access global markets.
Consider a hypothetical Mumbai-based healthcare startup developing an AI platform for early cancer detection that has put its $15 million funding round on hold as investors sought broader, geographically diverse clinical validation. Pilot studies covering both rural and urban areas pending regulatory approval may have ultimately led to value leakage and shifted potential growth towards a larger acquirer.
strategic priorities
Fragmentation is another major concern. Despite hosting over 70 incubators, few are equipped with a full suite of specialized features, such as pilot-scale purification systems, fill and finish suites and strong regulatory case support. These are important for pursuing promising technologies. As a result, entrepreneurs are often forced to shuttle between cities to complete the same development cycle, duplicating expensive equipment and bureaucratic processes, and wasting valuable scientific talent.
Regulatory complexities also slow progress. India’s existing frameworks for clinical trials, patent law and product approval were designed in an earlier era and now often fall short of the dynamic demands generated by AI-driven innovation and cutting-edge biologics. These delays not only postpone market entry: they also hinder international cooperation and investment.
To overcome these challenges and unlock the full potential of the biotech ecosystem, India needs to focus on several strategic priorities. First, the system should focus on getting deeper, not wider. That is, rather than spreading resources across a fragmented incubator landscape, India needs to consolidate its efforts into a few strong clusters.
For example, a “GMP Commons” in Genome Valley or the Mumbai-Pune corridor, jointly funded by the government, multinational companies and development finance institutions, could pool expensive downstream equipment and expert services that individual startups could never do alone.
talent challenges
It is urgent to close the financing gap. A dedicated biotechnology fund based on innovative digital venture structures could provide similar equity or venture debt to companies that have demonstrated proof of concept but are not yet market-ready. Mixed-finance structures will attract institutional capital from insurance companies and pension funds while providing partial guarantees to mitigate scientific risks.
Third, the establishment of late-stage testing centers will significantly streamline product development. For example, a network of specialized centers within All India Institute of Medical Sciences hospitals could allocate dedicated ward space, imaging suites, and integrated electronic-health-record systems specifically for industry-sponsored clinical trials. Harmonized ethics committees and centralized laboratories can subsequently reduce delays in testing, ensure data integrity and reassure international regulators.
Fourth, it is paramount to address talent challenges through reverse brain drain initiatives. Policies including tax holidays, relocation grants and soft loans could attract post-doctoral scientists back to India, while micro-credential courses in areas such as CRISPR process engineering, GMP data integrity and AI-driven biostatistics will ensure the workforce remains competitive.
Finally, adopting a risk-based, context-specific regulatory framework that mirrors successful models such as the EU’s Tiered AI Act and the US Food and Drug Administration’s predetermined change control plans could help tailor validation to dataset diversity and algorithm performance without imposing unnecessarily stringent controls on all innovations.
organize and harmonize
There are several promising focus areas for startups looking to capture new value. AI-powered drug design, molecular diagnostics and digital health platforms are gaining significant traction in innovation hubs like Bengaluru and Hyderabad, especially in accelerating drug discovery and improving clinical diagnostics. Precise genomics and affordable gene therapy using technologies such as CRISPR have the potential to address chronic diseases that burden both domestic and international markets.
In parallel, sustainable agricultural biotechnology continues to offer immense opportunities. With 85% of Indian farms being smaller than 2 hectares, startups are deploying precision agriculture technologies that optimize irrigation and pest control; For example, leading companies like Cropin and Fasal have demonstrated how localized AI integration can increase yields and cut input costs.
Additionally, India’s established strengths in vaccine production, biosimilars and generics strengthen its potential as a global export hub. The launch of the world’s first intranasal COVID-19 vaccine by Bharat Biotech is an example of how Indian innovation can achieve global impact. Meanwhile, long-established giants like Serum Institute of India and Biocon have set international standards for quality and cost efficiency, laying the groundwork for domestic startups to leverage their expertise into high-value products.
Looking ahead, global leadership in biotechnology will require India to smartly streamline its ecosystem and channel resources into high-impact areas. Government, industry leaders and academia need to work together to strengthen funding, build integrated infrastructure and harmonize regulatory standards with international best practices. By focusing on these strategic priorities, India will be able to sustain its remarkable quantitative growth as well as achieve qualitative breakthroughs that will transform its biotechnology sector into a model of global excellence in health care and life sciences.
Deepakshi Cassatt is a scientist at GlaxoSmithKline in California. The views expressed here are those of the author and do not reflect the views of the Company.
published – October 16, 2025 05:30 AM IST
