India’s biotech surge has been nothing short of extraordinary over the past several years. From a modest count of roughly 500 startups in 2018, the number has soared to over 10,000 in 2025. This rapid expansion is supported by a network of 94 incubators across 25 States, fuelling innovation that’s transforming healthcare and the life sciences.
Government-backed initiatives including the BioE3 Policy and an ambitious vision to create a $300-billion bioeconomy by 2030 have set the stage for a sector poised to become a global powerhouse. Established companies such as Serum Institute of India and Bharat Biotech have long showcased India’s prowess in delivering affordable vaccines and generics, while home-grown pioneers like MedGenome and Strand Life Sciences are now driving breakthroughs in precision medicine and diagnostics.
Strong governmental support, investor confidence, and inherent competitive advantages are key factors behind the vibrant biotech ecosystem. Schemes such as Startup India, BIRAC-funded initiatives, and production-linked incentives have streamlined processes and attracted significant foreign direct investment (as India permits 100% FDI in many biotech segments). This openness has allowed the nation to become a leader in generics and vaccine production, supplying over 60% of global doses for immunisations such as DPT, BCG, and measles.
After the early stage
At the same time, startups are embracing artificial intelligence (AI) to revolutionise research and development. Companies like MedGenome are using AI-driven 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 positioned India at the forefront of biotech innovation.
Despite these achievements, the sector faces significant challenges that keep this momentum from going on. Although headline investments over the past two years have reached around $3 billion, capital is extremely scarce when companies require tens of millions of dollars to scale for phase II clinical trials or build dedicated good-manufacturing-practice (GMP) facilities.
While companies such as Inovio and Mylab Discovery Solutions have successfully navigated early-stage hurdles, others have found it difficult to secure additional rounds required to scale up to global markets.
Consider a hypothetical Mumbai-based healthcare startup developing an AI platform for early cancer detection that stalled its $15 million funding round because investors demanded extensive, geographically diverse clinical validation. Pilot studies covering both rural and urban regions for regulatory approval ultimately would have led to value leakage and shifted potential growth to a larger acquirer.
Strategic priorities
Fragmentation is another major concern. Despite hosting over 70 incubators, few are equipped with the complete suite of specialised facilities, like pilot-scale purification systems, fill-and-finish suites, and robust regulatory affairs support. These are critical to advance promising technologies. As a result, entrepreneurs are often forced to shuttle between cities to complete a single development cycle, duplicating expensive equipment and bureaucratic processes, and wasting precious scientific talent.
Regulatory complexities also slow progress. India’s existing frameworks for clinical trials, patent laws, and product approval were designed in an earlier era and now often fall short of the dynamic demands posed by AI-driven innovation and cutting-edge biologics. These delays don’t only postpone market entry: they also deter international collaboration and investment.
To overcome these challenges and unlock the full potential of the biotech ecosystem, India needs to address several strategic priorities. Foremost, the system must focus on being deep, not wide. That is, rather than dispersing resources across a fragmented incubator landscape, India needs to consolidate its efforts into a few robust clusters.
For instance, a “GMP Commons” in Genome Valley or a Mumbai-Pune corridor, jointly funded by the government, multinationals, and development finance institutions, could pool expensive downstream equipment and expert services that individual startups could never afford alone.
Talent challenges
Bridging the financing gap is imperative. A dedicated biotechnology fund modelled on innovative digital venture structures could provide matching equity or venture debt for companies that have demonstrated proof-of-concept but are not yet market-ready. Blended-finance structures would draw in institutional capital from insurance companies and pension funds while providing partial guarantees to cushion scientific risks.
Third, establishing late phase trial hubs would streamline product development significantly. For instance, a network of specialty centers within the All India Institute of Medical Sciences hospitals could allocate dedicated ward space, imaging suites, and integrated electronic-health-record systems exclusively for industry-sponsored clinical trials. Harmonised ethics committees and centralised laboratories could subsequently reduce trial delays, ensuring data integrity and reassuring international regulators.
Fourth, addressing talent challenges through a reverse brain drain initiative is paramount. 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 would ensure the workforce stays competitive.
Finally, adopting a risk-based, context-specific regulatory framework that mirrors successful models like the European Union’s tiered AI Act and the US Food and Drug Administration’s Predetermined Change Control Plans could help tailor validations for dataset diversity and algorithm performance without imposing unnecessarily rigid controls on all innovations.
Streamlining and reconciliation
There are several promising focus areas for startups looking to capture new value. AI-driven drug design, molecular diagnostics, and digital health platforms are gaining significant traction in innovation hubs such as Bangalore and Hyderabad, particularly in accelerating drug discovery and improving clinical diagnostics. Precision genomics and affordable gene therapies which utilize technologies like CRISPR hold 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 farming techniques that optimize irrigation and pest control; for instance, pioneering companies like Cropin and Fasal have demonstrated how localised AI integration can enhance yield and cut input costs.
Further, India’s established strengths in vaccine production, biosimilars, and generics only solidify its potential as a global export hub. Bharat Biotech’s launch of the world’s first intranasal COVID-19 vaccine exemplifies how Indian innovation can achieve global impact. Meanwhile, long-established giants such as Serum Institute of India and Biocon have set international benchmarks for quality and cost efficiency, laying the groundwork for domestic startups to leverage their expertise into products of higher value.
Looking forward, global leadership in biotechnology will require India to smartly streamline its ecosystem and channel resources into high-impact areas. The government, industry leaders, and academia need to work collaboratively to consolidate funding, build integrated infrastructure, and reconcile 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 healthcare and life sciences.
Deepakshi Kasat is a scientist with GlaxoSmithKline in California. The views expressed here are the author’s own and don’t involve those of the company.
Published – October 16, 2025 05:30 am IST
