Pharma, genomics industries expected to see increased investments

After the announcement of the Union Budget 2022, pharma and genomics industries are expected to see an increased investment that will further bolster local manufacturing in these sectors. 

Finance Minister Nirmala Sitharaman while presenting the Union Budget 2022 in the Parliament on Tuesday, identified pharmaceuticals and genomics as sunrise opportunities and said that the government will bring supportive policies for boosting domestic capacities of these sectors.

To encourage these sunrise sectors, the government will promote thematic funds for blended finance with the government share being limited to 20 per cent and the funds being managed by private fund managers, the finance minister indicated. 

“Supportive policies, light-touch regulations, facilitative actions to build domestic capacities, and promotion of research & development (R&D) will guide the government’s approach. For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry and public institutions, government contribution will be provided,” she said. 

The sectors have seen growth in the past few years. The Economic Survey 2021-22 showed that the Indian pharmaceutical sector witnessed a 200 per cent increase in foreign direct investment (FDI) in 2020-21. FDI in the pharmaceutical sector saw a sudden spurt in 2020-21 vis a vis the previous year showing a 200 per cent increase. In 2021-22 (April-September) the FDI inflows continued to be buoyant at Rs 4,413 crore, growing at the rate of 53 per cent over the same period in 2020-21, according to the survey report. India’s genomic market is still emerging. 

“To build and grow the research-driven biopharmaceutical industry in India we continue to seek an enabling, supportive regulatory and policy framework that encourages and promotes research in order to bring positive patient outcomes. Further the Union Budget 2022 outlines ‘Genomics and Pharmaceuticals’ as the sunrise opportunities eligible for a supportive framework to build domestic capacities and promote Research & Development,” said Sanjiv Navangul, Managing Director & CEO, Bharat Serums and Vaccines Ltd (BSV). 

India’s domestic pharmaceutical market is estimated at $42 billion in 2021 and likely to reach $65 billion by 2024 and further expand to reach ~$120-130 billion by 2030. In August 2021, the Indian pharmaceutical market increased at 17.7 per cent annually, up from 13.7 per cent in July 2020. According to India Ratings & Research, the Indian pharmaceutical market revenue is expected to be over 12 per cent Y-o-Y in FY22. 

The pharma industry experts said that in the Union Budget 2022 they see a thrust on macro areas like digital, VC-ecosystem, Ease of Doing Business and supportive measures for R&D and industry-academia collaboration with pharma included in the sunrise sectors.  

“The extension time limit for the commencement of business to claim benefits of concessional tax regime for manufacturing companies has been extended by a year to March 31, 2024. This will support the investment in pharma manufacturing. Details are being examined and the implementation will be key going forward,” said Samir Mehta, Chairman, Torrent Group. 

The government for the last two years has been investing in the genomic sector. The Department of Biotechnology (DBT) initiated the ‘Genome India Project’ (GIP) on January 3, 2020 that aims to collect 10,000 genetic samples from citizens across India, to build a reference genome. The DBT is running several other genome related projects. The industry experts believe that the growth in the sector after investment will also create employment opportunities.  

“Investments in pharmaceuticals and genomics sector would enable well-rounded development beyond employment and access to enhanced industry efficiencies and competitiveness, which will go a long way in attracting increased investments in biopharmaceutical innovation,” said Vani Manja, Country Managing Director at Boehringer Ingelheim India. 

“Our progress in research and development is inextricably linked to fostering a culture of innovation. Allowing for additional provisions towards establishing a stronger IPR ecosystem in the country is imperative to improve the Ease of Doing Index in India and further propel FDI in the pharmaceutical sector,” said Manja. 

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