National pride to me symbolises the convergence of the aspirations of our people with the political vision of the country. Over the last decade, there has been a great shift in national pride-for the better. In the 1990s, national pride emphasised our past achievements. Today, it's about our confidence in the future. In the past, we basked in the glory of our forefathers, but today we perceive ourselves as creators of new history, directing our own destinies. The ''Made in India'' label is no longer something that we need to defend. Rather, it is something that we can project with a sense of national pride. Information technology has provided India with a powerful branding platform, which has raised national pride to an all-time high. We've gone from being a non-brand to being a known-brand.

In the coming decades, Brand India will only get more powerful. As information, innovation, and imagination will be the prime drivers of the new knowledge economy. And India-as a rich reservoir of these attributes-is ideally placed to emerge as its new leader. Today, biotechnology is playing an increasingly important role in addressing unmet medical needs, augmenting food and agricultural production, and addressing environmental sustainability. Therefore, I perceive biotechnology as the next big economic opportunity for Brand India.

Research and development (R&D) is the soul of this emerging domain and India exhibits global advantage through its large reservoir of scientific talent, engineering prowess in process development and manufacturing, and rapidly developing clinical research capabilities.

Low-Cost Innovation

Success in biotechnology will largely depend on our ability to offer high-value innovation at lower costs. It is, therefore, imperative to evolve fiscal and regulatory policies that address issues such as capital intensive research and manufacturing, long gestation timelines for product commercialisation, and investments in patenting and technology licensing. Biotechnology has the potential to generate revenues worth $5 billion (Rs 23,000 crore) and create a million skilled jobs over the next five years. This can propel India into a significant position in the global arena.

However, the biotech sector is burdened with enormous economic expectations. In spite of the fact that the nation strives to attain global recognition for its biotech capabilities, government policies do not reflect its global aspirations. Investment is inadequate, funding is scarce, infrastructure is expensive, and regulatory regimes are deficient. Despite the difficult environment, entrepreneurs are bravely setting up new ventures in the country. What this reflects is an intrinsic belief in biotech as a business of the future.

Although India is a signatory to WTO and trips, investors remain sceptical about the protection of intellectual property (IP). International investors and VCS continue to voice their concern and Indian industry finds it difficult to allay these fears. However, 2005-when the new patent regime comes into force-will likely prove to be a watershed year. I expect a boom in foreign investment in R&D. Already several biotech companies have managed to cross these IP hurdles and are now successfully working with international partners on the basis of confidentiality and non-disclosure agreements. These spell out the terms of sharing potential intellectual property that is likely to emanate from such partnerships.

Unfortunately, the pharmaceutical industry has a greater difficulty in demonstrating its support for an internationally compliant patent regime that ensures protection of IP. For the two industries to grow and to foster original research, it is imperative that our national policy signals an environment that provides for protection of IP and data exclusivity.

Emulating Successful Models

Custom research is a services model that most Indian biotech companies have opted for at the start-up stage in order to earn early revenues to fund infrastructure and salaries. These companies plan to move on to the product development phase once they attain profit levels sufficient enough to sustain original R&D. There also exist opportunities to move up the value chain through discovery-led research programmes on shared IPR and milestone payments. However, this again depends on the existence of a strong patent regime. This segment is expected to generate revenues in excess of $1 billion (Rs 4,600 crore) by 2010.

Biogenerics is another low-risk route that is being pursued by biotech companies in the country. Not only are the regulatory hurdles in India for such biogenerics lower than those in the US and Europe, but also the market opportunities are more immediate. What's significant about the biogenerics business is that it offers India an opportunity to become a leader in the area of recombinant protein producing technologies based on expression vectors (the piece of DNA that contains all of the functional domains for replication) that is not yet commercialised in the US and Europe.

As of January 2003, there are four indigenously developed biogenerics in the Indian market: Recombinant Hepatitis B Vaccine, Interferon Alpha 2b, Erythropoeitin and GCSF. The year ahead is expected to see the launch of Recombinant Human Insulin, Streptokinase, and Recombinant Cholera vaccine. Monoclonal antibody technology is also being developed indigenously. This is expected to provide the biotech sector with a manufacturing advantage and, more importantly, high value intellectual property.

The regulatory approval of BT Cotton in 2002 has provided a fillip to the future of genetically modified crops. The ambivalence of Europe and some other countries over genetic manipulation offers India an opportunity to become a global player in agri-biotechnology. Added to this is the discovery opportunities in the area of phyto-pharmaceuticals.

India's software skills offer us an edge in bioinformatics. The opportunities stretch across the value chain from clinical data management and instrumentation software development to mining of genomic and proteomic data. Several global companies have established informatics divisions in India to take advantage of cost competitive skills in data management, structure analysis, and data mining.

Bioinformatics is a segment that offers attractive innovation and discovery opportunities to Indian biotech companies in designing new drug molecules, mining novel bio-markers, generating new pharmaco-genomic data and creating high value medical wisdom based on phenotypic and genotypic data. The first such software program for Type II Diabetes Mellitus is currently being validated on extended patient populations. Therefore, in the years ahead, we can expect a large number of collaborative initiatives among software, biotech and pharma companies.

India's vast population provides enormous clinical research opportunities. The cost of drug development is largely attributed to the cost of conducting clinical trials. It's an expensive and long-drawn process that tests the drug on an increasing number of subjects. Indian CROs (Clinical Research Organisations) have an opportunity to access the $10 billion (Rs 46,000 crore) global market for clinical trials. The presence of a large talent pool of medical and para-medical professionals is conducive to building a strong clinical development infrastructure. A government policy to permit Phase 1-4 clinical trials is on the anvil. The sector is likely to play a major role in India's biotech future. CROs across the world already have recognised the opportunity in the country and set up shop in anticipation of policy changes.

Apart from Phase 1-4 clinical trials, Indian companies have a large commercial opportunity in pre-clinical and ''proof of concept'' studies, which can allow biotech companies in, say, the us and Europe to forward-integrate their drug development programmes at lower costs and shorter lead times. This could also serve as a low-cost validation option, even if these trials were required to be repeated in the West. Alternatively, the monetary risk could be shared with an Indian partner who is keen to backward integrate into research and discovery. Such bio-partnering opportunities need to be encouraged strongly by the VC community as a de-risking strategy.

The Future

The Indian biotechnology sector is in its early phase of development and, arguably, at a relatively low level on the value chain. But the country has everything it needs to take biotech to a higher level. There are approximately 200 biotechnology companies in the country, with a combined revenue of $500 million (Rs 2,300 crore) and 10,000 scientists in their research programmes. There are 40 national research laboratories employing 15,000 scientists. There are more than 300 college-level educational and training institutes offering degrees and diplomas in biotechnology, bioinformatics and the biological sciences, producing nearly 500,000 students on an annual basis. There are more than 100 medical colleges that churn out 10,000 qualified medical practitioners every year.

Given this vast pool of skilled researchers, India is in a good position to create a biotechnology business that is globally competitive. The sector is gradually building critical mass both in terms of infrastructure as well as markets. Our success in building a global business will depend on the industry's ability to apply its people resource in a knowledge intensive manner, and create niches in areas such as phyto-pharmaceuticals and drug development. A strong patent regime, regulatory reforms that permit Phase I clinical trials, and pragmatic fiscal support to R&D will enable India to realise its global aspirations in biotechnology.