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Investments
from venture capital biggest challenge: CII Biotech Survey
EPP
News Bureau - New Delhi
One
of the biggest challenges for the Indian biotech industry is promoting
investment by venture capital in the sector. This has been revealed
in the recent survey conducted by the Confederation of Indian Industry
(CII) on the biotech sector, covering 52 companies in the modern
biotech sector.
According
to the CII survey, though venture capital flows to the tune of Rs
3 billion has been estimated for the biotech sector, it is still
low for the growing biotech industry and accounts for less than
20 per cent of total funding made in India.
Banks
still remain the major financing source of biotechnology, the CII
survey has pointed out. Small Industries Development Bank of India
(SIDBI) and Indian Credit and Investment Corporation of India (ICICI)
have committed about 35 per cent each, according to CII. Moreover,
the internal funding by individual companies is still insignificant
and account for only 10 per cent of the total funding types in India,
according to the CII survey. There has been significant increase
in both government’s as well as industry’s outlay for
biotechnology over the past decade.
However,
the investments made in the R&D at present are insufficient
and hence need to be increased substantially for the growing biotech
industry and to make it globally competitive. Lack of public awareness
coupled with the missing link between research and commercialisation
are some of the other weaknesses that are hampering the development
of the biotech sector in India. However, the survey has pointed
out that there exist vast opportunities for the Indian biotech sector
both in terms of growth in the domestic market as well as from the
point of view of export potential.
The
revenues of the biotech sector have also been growing over the past
few years. While the total project investment by the companies undertaken
in the survey was over Rs 500 crore in the last decade, the total
revenues have been over Rs 700 crore.
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