Intro: The Government of India has permitted Foreign Direct Investment (FDI) up to 100 per cent through automatic route for Greenfield Projects in biotechnology. A host of fiscal, financial, institutional and infrastructural incentives have also been provided to investors in this industry. Some of the items like hybrid and genetically modified seeds in this industry carry huge opportunities for business.
Biotechnology is another sunrise industry on the global horizon. The advent of genetics and nanotechnology has opened up new vistas for development of hybrid and genetically modified seeds which are both disease resistant and higher yielding and the development of pharmaceutical and industrial products with better efficacy. India, the gifted country that it is, has an innate advantage as a research, development and production hub even in this industry.
Let us cast a look at some of the relevant statistical figures which show the promise and potential of investing in biotechnology industry in India. The projected investment in India during the five year period from 2012 to 2017 is US Dollar (USD) 3.7 billion. It is also envisaged that biotechnology will be a USD 100 billion industry in India by 2025 at the average growth rate of 30 per cent. There are five major segments of biotechnology industry. These are-bio pharmaceuticals, bio-services, bio-industrial and bio-informatics products. Biopharmaceuticals have a revenue share of 64 per cent in biotech sector and 51 per cent of this share comes from exports. India’s Unique Selling Proposition (USP) in this industry too is its cost effective manufacturing capabilities, which arise from its low cost of skilled and semi skilled labour and also low cost of basic raw materials. Accordingly, it did not take long for it to become an international outsourcing hub for clinical trials, contract research and manufacturing activities. India offers a combination of skilled manpower, low costs, and a large pool of existing Research and Development (R&D) institutions to the global biotechnology industry. In addition, the Information Technology (IT) revolution in the country has benefited the pharmaceutical sector, which in turn has helped in the evolution of the biotechnology sector over the last decade. Consequently, India currently ranks amongst the top 12 biotechnology destinations in the world and is a global leader in the production of vaccines and industrial enzymes for green technologies.
In a critical perspective, it is observed that biotechnology products hold business potential preponderantly in exports. Therefore, it makes sense to restrict Foreign Direct Investment (FDI) in this industry to 49 per cent to limit remittance of income in foreign exchange. India is a resource rich country in terms of agricultural as well as industrial produce and looking at the fact that less populated and resource deficient countries would be requiring biotechnological products far more than India, it would be business prudence to focus on exports in this industry. There is another important matter which needs to be seriously considered while devising the investment and business strategy for biotechnology industry in India. That is the ramifications of biotechnology products on environment, effects of genetically engineered foods on human and animal health and effects of genetic engineering practices like development of genomes and clones on future breeds of animals and plants. Many of these areas are grey areas and facts including possible adverse fall outs of genetic engineering could crystallise only with time and experience.
While talking about biotechnology industry in India, it would be appropriate to mention the challenges which this industry has been facing. The first is a lack of adequate resources for research and development, molecular and chemical screening libraries and level 3 bio safety facilities for research on infectious diseases. Another challenge has been the shortage of skilled manpower in research areas. Business houses and investors, both domestic and foreign, should be roped in for filling the deficient areas. We need to raise the bar of standards in biotechnology education in the country and ensure attractive remuneration for professionals engaged in biotechnology research and development.
Modern scientists and large sections of the human community served by them have gone overboard with enthusiasm about the products of biotechnology including genetic engineering, without a complete understanding of the possible adverse effects of usage of these products on environment and health of flora, fauna and humans. There is a definite need to go slow and be cautious, shifting business and commercial interests a little aside. The cost of possible damage to health of living beings and the physical environment could be tremendous and further investment in biotechnology should well consider this. It is felt that ancient Indian scientific knowledge base should be studied for guidance in this regard.
(The writer is a senior columnist)
