2013, heralds the dawn of a new economic
era that can aptly be called a “Bio-economy”. This new era will unleash the
power of biotechnology to promote socio-economic progress by transforming
agriculture, healthcare, energy and the environment, offering India the
opportunity to emerge as a leading bio-economic power.
The Indian biotechnology sector grew
21.5% in 2011-12 in the midst of an economic slowdown. With focused strategic
intent, this industry can chalk up a CAGR of 30% to cross $100 billion in
revenues by 2025. Let me explain how.
Imbalance between the agriculture,
manufacturing and services sectors has skewed India’s economy. For instance,
52% of the working population is employed in agriculture despite it
contributing a mere 14% to the GDP. Clearly, the sectoral structure of India's
growth has provided insufficient employment opportunities for the poor. With
agricultural productivity low and manufacturing sub-optimal, the poor have
failed to get the employment opportunities needed to participate in India’s
growth story. We require well-balanced growth with the three sectors reinforcing
each other. Indian Biotech sector as it stands today at $ 7.5 Bn has the
potential to generate growth and employment in each of these sectors whilst
addressing the grave challenges we face in terms of food security, healthcare
needs, energy scarcity and environmental degradation.
To realize this, we need a two-pronged
strategy: 1. A policy roadmap that balances the contribution of the sectors and
2. An enabling framework that promotes biotechnology.
Agriculture: This moribund sector is
trapped in an endless loop of low productivity and farmer distress.
Biotechnology can usher in a second Green Revolution, offering unprecedented
opportunities to ensure food security along with the economic well-being of the
farmer. Biotechnology can boost yields while optimizing the use of available
resources. We need only look at how Bt-cotton has transformed the lives of the
6 million farmers engaged in cultivating Bt cotton. Productivity has nearly
doubled and pesticide use has significantly reduced. Today Bt cotton accounts
for 90% of the 11 million hectares under cotton cultivation with an annual
output of 35.5 million bales (7.1 million tons) making India the world's second
largest cotton producer, next only to China. From being a net importer, this
has helped India emerge as a net exporter of cotton while strengthening its
textile industry to generate increasing employment opportunities. Bio Agri at $ 4 Bn is the largest segment of
Indian Biotechnology.
Action: Instead of making ad-hoc
decisions under political compulsions, the government must articulate a clear
bioagriculture policy that allows the use of safe GM technologies for increased
yields and enhanced nutritional value.
Manufacturing: This sector is shackled
by high capital costs and antiquated land and labour laws. India’s expertise in
fermentation-based technologies gives us an edge as the world seeks to
manufacture biopharmaceuticals, biofuels, and enzymes cost-efficiently. We have
already proven our leadership in vaccines and attained global scale in generics
and antibiotics. Indian Biopharma as the second largest segment at $2.5 Bn is
fast gaining global recognition.
Action: If India is to reboot the sector
and become the ‘Pharmacy of the World’, the government must create an enabling
physical, financial, legislative, and regulatory infrastructure.
Services: Global pharma giants are
reeling under high R&D costs and an impending loss of patent protection in
the coming years. With its low-cost, world-class scientific talent, India can
position itself as the ‘Laboratory of the World’ to develop groundbreaking
drugs, vaccines and diagnostics through affordable innovation. Bioservices
business in India has attained a critical mass at S$ 1Bn, and poised to
exponentially grow from here.
Action: We require an innovation
ecosystem that provides access to risk capital. We also need special listing
norms for innovation-led biotech companies through a secondary stock exchange
that allows access to capital markets.
Biotechnology can be a game changer and steer
India on to a strong economic growth path that inherently provides
opportunities to all strata of society. However, implementing the right
fiscal, regulatory and infrastructure policies is fundamental in order to
ensure a Bio-economy for India that can deliver an age of inclusive growth.
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