The Indian biotechnology sector is one of the fastest growing knowledge-based sectors in India and is expected to play a key role in shaping India's rapidly developing economy. Currently, India holds two per cent share of the global market. With numerous comparative advantages in terms of research and development (R&D) facilities, knowledge, skills, and cost effectiveness, the biotechnology industry in India has immense potential to emerge as a global key player.

The Indian biotech sector’s overall turnover in 2008-09 was US$ 2.51 billion, as compared to US$ 2.13 billion in 2007-08. Bio-pharma contributed US$ 1.6 billion; bio-agri nearly US$ 311.28 million, bio-industrial segment US$ 99.19 million and bio-informatics grew 15 per cent to touch US$ 45.65 million.

According to a report by the Confederation of Indian Industry (CII) and consultancy firm KPMG, the Indian biotechnology sector is likely to become a US$ 5 billion industry by 2010. The report stated, "India is ranked among the top 12 biotech destinations in the world and is the third biggest in Asia-Pacific in terms of the number of biotech companies."

India is also gaining importance as a clinical trial destination. The global clinical research outsourcing market is projected to touch US$ 23 billion by 2011, with consultancy firm KPMG estimating that India will corner 15 per cent of this in two years.

Moreover, according to joint study by FICCI and E&Y, the industry-sponsored Phase II, Phase III clinical trial study sites in India have grown by 116 per cent over the last 15 months with the country moving from rank 18 to 12 across the 60 most active countries.

India participates in 7 per cent of the global Phase III trials and 3.2 per cent in the Phase II trials with industry-sponsored trials.

The Stem Cell Global Foundation, a New Delhi-based organisation promoting stem cell research, estimates the business to be growing at a compounded annual growth of 15 per cent and cross US$ 450 million next year.

Moreover, India has joined an elite group of six countries which have successfully decoded the human genome indigenously.

The discovery will bring pharmaceutical companies a step closer to designing drugs accounting for the specific characteristics of the Indian physiology.

The US, the UK, China, Canada and South Korea are the five other countries to map the genetic code.

Market Size and the Key Opportunity Segments

According to an industry survey, carried out by the Association of Biotech Led Enterprises (ABLE), biotechnology industry in India has notched up a growth of 20 per cent during 2007-08 and the revenues earned were worth US$ 2.56 billion as against US$ 2.1 billion during the previous fiscal. Research services touched US$ 500 million and bio-IT (bioinformatics) was US$ 250 million.

Further, according to the findings, going by the current trend and the new biotech policy of the central government, the sector is poised to generate US$ 13 billion to US$ 16 billion by 2015.

Major investments :

Investments, along with outsourcing activities and exports are the key drivers for growth in the biotech sector.

As per the survey carried out by ABLE, 56 per cent of the sector's total revenue of US$ 1.44 billion came from exports. Around 70 per cent of exports were from bio-pharma and 26 per cent from bio-services segments.

Private equity (PE) investments in the life sciences sector clocked US$ 183 million during the 10-month period between January and October 2008 compared with around US$ 173 million for the same period in 2007.