India, with its burgeoning life sciences industry, has become a prominent hub for research and development (R&D) in the global landscape. The country’s strategic location, competitive cost structures, and a rapidly growing pool of skilled professionals make it an attractive destination for companies seeking to expand their R&D operations. However, like any other industry, the expansion of life sciences R&D in India presents both opportunities and challenges. In this blog, we explore the key factors driving the growth of life sciences R&D in India and the challenges that must be addressed to sustain this growth.
Opportunities for Life Sciences R&D in India
1. Skilled Workforce and Talent Pool
With top-tier educational institutions and research centres, India boasts of world’s second largest life sciences talent pool globally. Over 1.2 Mn students had enrolled in pharma courses between 2015-20. This growing talent pool continues to attract international players looking to tap into the innovative potential of Indian researchers.
2. Government Support and Initiatives
The Indian government has been proactive in fostering a conducive environment for the growth of life sciences R&D. Various policy initiatives such as the Production Linked Incentive (PLI) scheme, BioE3 Policy, and the National Biopharma Mission, Promotion of Research and Innovation in Pharma MedTech sector (PRIP) have been instrumental in fostering research as well as manufacturing. The government has also introduced tax incentives and funding opportunities for R&D in biotechnology and pharmaceuticals, ensuring that Indian companies remain competitive on the global stage.
3. Cost-Effectiveness
India has long been known for its cost-effectiveness (30%–35% lower cost than in the US and Europe) and R&D (about 87% less than in developed markets). For multinational companies seeking to establish R&D facilities, this cost advantage translates into more efficient operations and higher returns on investment. The average salary of Life science scientist in India as of 2022 was $11,000 / year which is more than 9X cheaper than US. With a growing focus on contract research and development, many global pharmaceutical and biotech companies are increasingly outsourcing their R&D activities to India to leverage its cost-effective resources.
4. Favourable Regulatory Environment
The regulatory landscape in India has been evolving to support the growth of the life sciences sector. The Central Drugs Standard Control Organization (CDSCO) has taken steps to streamline approval processes, making it easier for companies to conduct clinical trials and bring new drugs to market. CDSCO approved 19 new drugs in 2024. This regulatory stability and the recent push for innovation-friendly policies create an environment ripe for R&D expansion.
5. Strategic Location and Infrastructure
India’s strategic location, with proximity to key global markets in Asia, the Middle East, and Africa, enhances its attractiveness as a hub for global R&D. The country’s growing infrastructure, including dedicated biotech parks and specialized life sciences clusters such as Genome Valley in Hyderabad, offers world-class facilities for life sciences research. Bengaluru life sciences cluster is also seeing an uptick in new life sciences companies coming up. These regions provide a collaborative environment where academic institutions, startups, and established companies can work together to drive innovation. Various life sciences cluster development initiatives have been taken up by various state and central governments over the years. India has 670+ FDA approved facilities and 2000 + WHO GMP approved facilities.
6. Transforming from Generic Manufacturing Hub to Global Innovator
While India is the largest global supplier of generics with a 20% market share, India has taken good strides over the past year in terms of life sciences innovation. Enmetazobactam became the first Indian New Chemical Entity (NCE) to get US FDA approval. Nafithromycin became the first indigenously developed drug for drug-resistant pneumonia. Indian scientists developed the country’s first human gene therapy for haemophilia A while NexCAR19, India’s first home-grown anti-cancer chimeric antigen receptor (CAR)-T cell therapy was launched in 2024. India’s vibrant start-up ecosystem, with over 6,000 life sciences start-ups and 75+ incubators, is driving progress and advancement in biotech, pharma, and healthcare industries.
Challenges Hindering R&D Expansion in India
1. Last Mile Connectivity
While India is making progress in building specialized biotech and life sciences parks, infrastructure gaps still exist, particularly in more remote regions. High-end laboratories, testing facilities, and specialized equipment are often not as readily available as in more developed countries. Improving infrastructure, particularly in terms of logistics and connectivity, is essential for India to remain competitive in the global R&D race.
2. Increased Government Funding & Incentives
Government should increase funding for research and development through measures like extending tax benefits to CROs and R&D firms through modification of 115BAB, reintroducing weighted R&D deductions under 35(2AB), and implementing a 200% deduction on R&D expenditures, alongside streamlined tax appeal processes.
3. Intellectual Property Protection
India’s intellectual property (IP) regime, though improving, still poses a challenge to life sciences companies. Issues around patent protection, especially concerning generic drugs, have created friction between multinational pharmaceutical companies and Indian firms. Strengthening the protection of intellectual property and ensuring a more transparent and reliable IP enforcement system is critical for attracting more investment in R&D.
4. Talent Retention
Many highly educated professionals seek better opportunities abroad, especially in countries with more advanced research infrastructure and higher pay. The migration of talent can deplete the local talent pool, creating challenges for long-term growth in the life sciences R&D sector.
Conclusion: A Bright Future, But Challenges Remain
India is poised for continued growth in the life sciences R&D sector, with its strong talent base, government support, and cost-effective resources making it an attractive destination for investment. However, to truly harness its potential and compete on the global stage with established players like China, the country must address key challenges related to infrastructure, intellectual property protection, and talent retention.
By overcoming these hurdles, India can solidify its position as a leader in life sciences R&D, driving innovation and contributing to advancements in healthcare on a global scale. The future of life sciences R&D expansion in India holds immense promise, but it requires a collective effort from the government, industry, and research institutions to unlock its full potential.
Written By: Flydon Melrick Picardo
