India’s pharmaceutical and biologics industry should be dominating global markets, yet it’s stuck in frustrating limbo between capability and achievement. The nation possesses world-class scientists, massive manufacturing capacity, and a proven track record in generics production that supplies affordable medicines worldwide. However, venture capitalists hesitate, regulatory approvals crawl forward at agonising speeds, and promising startups repeatedly hit walls when attempting to scale innovations. Billions in potential investment remain locked away whilst entrepreneurs watch opportunities slip through regulatory cracks and funding gaps. The cruel irony is palpable—India can produce medicines for the world but struggles to commercialise breakthrough innovations domestically. This disconnect between scientific promise and commercial reality reveals systemic failures that urgently need addressing if India wants genuine pharmaceutical leadership rather than perpetual potential.
Investment Reality: Progress Overshadowed by Persistent Gaps
India’s biotech and pharma sector peaked in 2018, attracting $399 million in investment before declining significantly in subsequent years. The first half of 2025 witnessed only scattered significant deals, including one rare $150 million round that highlighted cautious investor sentiment. The sector remains severely capital-starved, with private venture funding reaching merely a tiny fraction of the country’s 10,000-plus startups. Most investment historically prioritises generics and low-risk ventures whilst innovation-driven early-stage pharma startups struggle securing substantial high-value funding they desperately need.
Government-backed initiatives like Startup India Fund promised Rs 10,000 crore for alternative investment funds, yet capital hunger at the commercialisation stage remains unmet. Estimates suggest $6.2 billion is required for late-stage asset development alone, highlighting the massive funding gap between ambition and reality. According to GlobalData Thematic Intelligence, biotech private venture financing dropped 43.2% in 2023 compared to 2022, reflecting global economic headwinds. This decline demonstrates that whilst infrastructure improves incrementally, fundamental investment barriers persist, preventing transformative capital from flowing into India’s most promising ventures.
Systemic Hurdles: Regulations, Costs, and the Valley of Death
Several entrenched systemic obstacles inhibit investment flows crucial for scaling biotech innovation across India’s pharmaceutical landscape and emerging biologics sector. Lengthy, uncertain regulatory timelines mean new drugs or therapies face delays of two to three years for approvals, dramatically raising costs. Developing a single new drug in India typically costs upwards of ₹1,500 crore, creating substantial financial strain for startups. Prolonged intellectual property processes—usually taking five years or more—expose startups to copycat product risks that erode first-mover advantages completely.
Credits: FreePik
The infamous “valley of death” phase, transitioning from lab-scale to pilot and commercial production, exposes ventures to another cliff edge. Required cGMP facilities and sophisticated logistics remain costly and frustratingly rare for startups attempting to access essential manufacturing infrastructure independently. Most young firms lack resources to compete with established pharmaceutical giants, especially when navigating price controls on essential drugs nationwide. These controls impact profit margins severely, leading to profitability challenges even after successfully launching products that took years developing through expensive processes.
Infrastructure Deficits: Beyond Laboratory Walls
Infrastructure limitations remain acute, particularly beyond initial laboratory research stages where many startups find themselves stranded without adequate support systems. Many ventures cannot access high-quality manufacturing facilities, reliable cold-chain logistics, or essential regulatory support needed for clinical and preclinical scaling. Government and industry have developed biotech parks and incubators, providing baseline ecosystem support that helps early-stage research activities successfully. Many ventures report satisfaction with basic research infrastructure availability, but significant shortages persist in design, prototyping, and clinical validation facilities.
These gaps force several founders to rely on expensive international contract research organisations and manufacturing providers for essential services. Given India’s potential scale and scientific talent pool, these infrastructure deficits threaten timely execution and global competitiveness of its pharma pipeline. Startups typically benefit from DBT and DST-backed incubators during initial phases, but consistently hit roadblocks when ready for larger-scale operations. The frustrating lack of affordable, high-quality contract options for critical validation stages means promising innovations stall precisely when they need momentum most.
Pathways Forward: Strategic Interventions and Hybrid Models
Triggering sustained investment and innovation in Indian pharma and biologics requires public and private stakeholders co-investing through risk-sharing models effectively. This approach can bridge the persistent “chicken-and-egg” investment deadlock that currently paralyses progress across the sector comprehensively. Lessons from South Korea’s KDDF—a $1.5 billion government fund with targeted innovation incentives—demonstrate the transformative impact of dedicated fiscal interventions.
Flexible venture capital mechanisms, robust intellectual property systems, and global market access via regulatory harmonisation are absolutely essential going forward. Improving infrastructure for scale-up operations, launching dedicated exchange platforms for innovation-led startups, and offering targeted fiscal support for R&D will convert India’s pipeline into world-class commercial products finally. As Srikanth Mahadevan of Deloitte India notes, “Strategic partnerships and hybrid funding models, including government grants and private VC, are key.” These mechanisms can overcome both the funding drought and talent gaps simultaneously, creating sustainable growth rather than sporadic successes.
India’s pharmaceutical and biologics industry overflows with scientific promise yet remains trapped by chronic underfunding, regulatory delays, and inadequate infrastructure. Converting this vast potential into global leadership requires coordinated reforms, smarter funding models, and serious investment in scale-up facilities. The opportunity remains urgent—breakthrough innovations depend entirely on pushing past current roadblocks systematically rather than incrementally. Without decisive action, India risks remaining perpetually on the verge of greatness whilst competitors capitalise on opportunities it continues missing.