India’s bioeconomy has expanded more than sixteen-fold over the past decade, rising from $10 billion to more than $165 billion in 2024, and is projected to exceed $300 billion by 2030. Biopharma accounts for over 35% of the total, with companies increasingly focusing on biologics, biosimilars and cell and gene therapies, alongside traditional vaccines—a segment where India remains a global leader. Rajesh Jain, chairman of the CII National Committee on Biotechnology and chairman and MD of Panacea Biotec, speaks to Manu Kaushik about the weak private investment in biopharma R&D, emerging innovations, and the impact of a depreciating rupee. Excerpts:
Private-sector investment in biotech R&D has historically lagged government funding. What enabling factors are needed to catalyse private investment?
The issue is straightforward. Companies that can invest will do so from their own balance sheets. The real question is how to encourage companies that are already investing in R&D to step up their spending.
This is where government involvement becomes critical. R&D investments do not always yield results, and companies are unlikely to commit billions of dollars unless they have some assurance that a portion of that investment can be recovered. One solution could be consortium-based models, where industry, government and academia pool resources to drive innovation.
These efforts can take decades to bear fruit, which means sustained investment from like-minded companies in areas with national and global relevance. Expecting every company to independently invest heavily in R&D is simply unrealistic.
Biopharma manufacturing is heavily skewed toward vaccines. Do you see other segments gaining share?
These segments are very different. Vaccines will continue to grow because they are essential for protecting newborns, children and adults. However, in developing countries, awareness around adult vaccination is low, and people are often unwilling to pay for it.
Government investment in immunisation awareness is also inadequate. Prices are controlled, and individuals are reluctant to invest in preventive healthcare. When governments step back, UN agencies and non-profits step in, procuring vaccines and distributing them free of cost. As a result, the vaccine segment will continue to expand at a relatively fast pace.
What about innovation within vaccines?
Innovation is happening, but not at the pace seen in pharmaceuticals. Developing a new vaccine typically takes around 10 years.
India imports a significant share of biopharma raw materials while exporting vaccines. How will a weaker rupee impact the sector?
In the near term—over the next year—the rupee may remain volatile and biased toward depreciation. But over a one- to two-year horizon, it should stabilise as the economy strengthens. That said, a weaker rupee is broadly positive for the biotech sector because exports exceed imports. For vaccine manufacturers, nearly 90% of production is exported. Imports typically account for about 25% of revenues and are largely internally hedged.
Biotech logistics infrastructure is widely seen as underdeveloped. What’s holding it back?
Only a handful of companies are truly purpose-driven. Serum Institute of India and Bharat Biotech operate largely on internal capital. Panacea Biotec is the only publicly listed biotech company in this space. For many others, the economics do not add up. Promoters are reluctant to invest in areas with uncertain returns and prefer businesses that can deliver faster revenue growth. Upgrading logistics requires replacing existing infrastructure, which generates no immediate revenue and involves waiting several years for returns.
Biotech startups have surged, crossing 10,000 in recent years. What’s driving this growth?
A significant amount of capital flowed into startups over the past four to five years. However, many hit a funding wall once they reach more advanced stages. Typically, startups receive ₹4–5 million through government schemes, allowing them to reach early milestones. But they often stall at the pre-clinical or Phase I trial stage, where funding requirements increase sharply. That kind of risk capital is currently scarce in India.
The startup boom is also a result of the government distributing small amounts of seed capital across a large number of entities, which has helped expand the ecosystem but not necessarily sustain it.
The BioE3 policy approved last year proposes biomanufacturing hubs and biofoundries. What progress has been made?
Several initiatives are embedded in the policy, but implementation will take time. Proposals have been floated by state governments, and the process is still at an early stage.
How is AI being used in India’s biopharma sector?
Adoption has just begun. At Panacea Biotec, we are using generative AI, particularly in critical manufacturing processes. For example, during injectable production, reducing human intervention lowers contamination risk. We have replaced manual processes with automated robotic systems.
In product development, AI helps with molecular design and experimental planning, significantly reducing timelines. However, results cannot yet be relied upon entirely. Over the next couple of years, more validated case studies will emerge.