India has been practising conventional biotechnology for several decades. However, during the last five years, genetic engineering, immunological techniques, cell culture methods and hybridoma technology are increasingly being used to manufacture new products and research in these areas in the country has intensified. Sector-wise estimates of current and  future consumption of biotech products are furnished below:

                                    Rs. in million
Biotech Products    Actual Consumption
1999    Future Consumption Estimates  
2005    Future Consumption
Human & Animal Healthcare Products    32240
    35320    93540
Agriculture Products (incl. seeds)    25670    28880    78720
Industrial Products    27090    28500    53590
Other Biotech products    1040    1300    7940
Total    86040    94000    233790


The Department of Biotechnology (DBT) is the nodal agency for policy, promotion of R&D, international co-operation and manufacturing activities. The government has been increasing the outlays for biotechnology over the past decade. The budgetary allocations have gone up by a tremendous amount from Rs.404 million in 1987-88 to Rs.1138 million in 1997-98 and to Rs.2356 million in 2002-03. The Govt. is also planning to introduce additional venture capital funds in line with its technology development fund (TDF) to promote small and medium biotech enterprises.

A study conducted jointly by BioSpectrum and the Association of Biotechnology Led Enterprises (ABLE) indicates that the Indian Biotech Industry recorded a total turnover of Rs.1830 crores (US $ 400 million) in 2002-03. Exports contributed significantly in the growth of the industry as it comprises 53 per cent (Rs.975 crores) of the total market for biotech products. The industry is estimated to grow by 25 – 30 per cent in 2003-04. Investments are expected to double in the next two years. Total investment in the biotech sector has risen from Rs.505 crores in 2001-02 to Rs.635 crores in 2002-03.

Venture capital funding of about Rs.3000 million has been estimated for the biotech sector. SIDBI and ICICI have committed about 35% each. Banks still have a major role to play in the funding of this sector.  Considering the growth prospects of the industry, Commercial Banks have tremendous scope to participate in the development of this new growing segment. The Banks will have to understand the specific requirements of the industry, especially in the area of R&D and develop new products to suit the requirements of the industry to reap rich dividends in  near future.



•    Large trained/ skilled manpower and knowledge base
•    Excellent network of good research laboratories
•    Rich Biodiversity
•    Well developed and organized base industries (e.g. pharmaceuticals, seeds)
•    Access to intellectual resources of NRIs in this area.
•    Feasibility of extensive clinical trials and research due to access to vast and diverse disease population
•    Diverse human gene pools offer an exciting opportunity for genomic. 

•    Missing link between research and commercialization
•    Lack of venture capital
•    Low R&D expenditure by industry
•    Image of Indian Industry – doubts about ability of Indian products to meet international quality standards. 

•    Large market
•    Export potential
•    Base for contract research for international companies due to rising costs of R&D abroad.
•    Large number of patients covering wide range of diseases.


•    Risk of anti-biotech propaganda gaining ground.
•    IPR policies.

The Drugs and Cosmetics Act, 1940 (Drugs Act):

The Drugs Act and Drugs and Cosmetics Rules, 1945 (the Rules) regulate the import, manufacture, distribution and sale of drugs in India. It provides the procedures for testing and licensing of new drugs. The main objective of the Act is to ensure availability of standard quality drugs and cosmetics to the consumer. In order to achieve the objectives, a drug is defined comprehensively to include various substances in the definition of drug. The responsibility to enforce the Act is entrusted with both the Centre and State. The Central Drugs Standard Control Organisation, headed by the Drugs Controller General of  India (DCGI) is mainly responsible for coordinating the activities of the state drugs control organisation, laying down policies, and ensuring uniform implementation of the Act throughout the country.

The procedures under the Drugs Act involve obtaining a series of approvals for the different stages at which the drugs are tested, before the DCGI grants the final license to allow the drug to be manufactured and marketed.

The Environment Protection Act, 1986 (EPA):

The EPA authorizes the central government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and/ or operation of any industrial facility on environmental grounds. The biotechnology regulatory approval process was developed within the framework of this act by way of  ‘Rules’ made by the Ministry of Environment and Forests (MoEF) and Department of Biotechnology of the Ministry of Science and Technology.

Cell Rules, 1989:

Manufacture, import and storage of Genetically Modified Organisms (GMOs) in India is regulated by the Manufacture, Use, Import, Export and Storage of Hazardous Micro-organisms/ Genetically Modified Organisms or Cell Rules, 1989 (Rules). These Rules are made under delegated powers given by the EPA. the rules are framed by MoEF with the objective of protecting the environment, nature and health in connection with the application of gene technology and micro-organisms.  The rules define micro-organisms to include ‘ all the bacteria, viruses, fungi, mycoplasma, cell lines, algae, protodones, and nematodes’ indicated in the schedule and those that have not been presently known to exist in the country.

Biological Diversity Bill 

India has a rich and varied heritage of biodiversity, encompassing a wide spectrum of habitats from tropical rainforests to alpine vegetation and from temperate forests to coastal wetlands. As a signatory of the Convention on Biological Diversity (CBD), India has the responsibility of protecting the sovereign rights over its biodiversity, which is considered to be the raw material for the biotechnology industry. The Biological Diversity Bill, 2000 (Biodiversity Bill) was introduced in Parliament in May, 2000 and is currently under review from a Parliamentary Committee.

The Biodiversity Bill has made provisions to regulate the flow of genetic material and the traditional knowledge of its use, with equitable benefit sharing with the local communities. It seeks to protect the country’s biological resources from foreigners but gives Indians free access to these. The Bill envisages setting up of a National Biodiversity Authority (NBA) to regulate the movement of bio-resources in the country.

Sources & References:

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