Government collaborations and quicker fund deployment could advance biotech: New Businesses

India’s newly launched Rs 2,000 crore biotechnology fund must move quickly and go beyond financial assistance to truly support startups, industry founders said, stressing that capital alone will not solve structural challenges in the sector.

The fund, launched on February 13 by the Biotechnology Industry Research Assistance Council (BIRAC), aims to bridge the gap between laboratory discovery and commercial production for biotech startups. It forms part of the broader Rs 1 lakh crore Research and Development and Innovation Fund.

Startup founders say faster deployment and stronger demand-side support are critical. “The deployment must be accelerated. If you have funds today, you can do something meaningful in two years,” said Hitesh Goswami, founder of 4BaseCare, a precision oncology company that plans to apply under the scheme. He added that funding should prioritise companies offering local solutions and that the government should adopt such innovations within public institutions, including hospitals.

Without a demand push, even well-funded domestic startups struggle to gain market traction, Goswami noted, adding that 4BaseCare largely partners with private firms. BIRAC managing director Jitendra Kumar said the fund will target startups that have reached proof-of-concept or advanced development stages, especially those entering pre-clinical trials for new molecules. Deployment cycles will run for 12 months, with the initiative set to roll out in the coming months.

Regulatory complexity remains a major hurdle, founders said. “Companies often lose time not because they are doing anything wrong, but because navigating approvals is opaque and slow,” Goswami said. Drug discovery can take up to 15 years from lab to patient, said Ganapathy Subramaniam, founding managing partner at Yali Capital. “Regulatory testing alone consumes more than two years, longer than almost any other deep-technology sector. So, this is a very important step from the government,” he said.

The fund comes at a time when India’s biotech ecosystem has expanded rapidly, from about 50 startups in 2014 to more than 11,000 today — a surge that Union minister Jitendra Singh described at the launch event as a “quantum jump”.

However, access to existing incentive schemes remains uneven. Sachin Santhosh, founder of Accel-backed Scimplify, said smaller firms struggle to benefit from production-linked incentives (PLIs), which he argued largely favour large manufacturers. Extending such benefits to smaller players would be as important as launching new funds, he said.

Talent retention is another concern. Santhosh noted that India continues to lose researchers to the United States and the United Kingdom, calling for programmes to attract them back. He cited clusters such as Genome Valley and the emerging Bengaluru Lifesciences Research District as positive steps in building innovation ecosystems.

Industry executives also highlighted contract manufacturing as a major opportunity. With global drugmakers diversifying production away from China, India’s manufacturing capacity and regulatory expertise position it well to compete, Subramaniam said. However, securing such mandates requires sustained investment, strict compliance and years of trust-building — a path companies such as Laurus Labs and Divi's Laboratories have spent years navigating.