From policy to progress: Government initiatives impacting India’s lifesciences real estate sector

Supported by a thriving ecosystem, India has risen as one of the leading global lifesciences hubs in the last few years. This ascent is marked by the COVID-19 pandemic as the turning point that brought the pharmaceutical, biotech, and MedTech sectors into the limelight. The government of India also took note and launched initiatives to strengthen the lifesciences ecosystem in India, especially in light of Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY) and Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana (PMBJP). 

The roadmap to boost India’s biotechnology, pharma, and MedTech industries included improving the rules and guidelines for developing new products as per international standards, incentivising investments in research and development (R&D) through financial assistance and tax breaks, building a supportive environment to encourage cross-sectoral research and developing advanced technologies, and consistently backing the medical devices industry through the production-linked incentives.

These strategies are expected to attract more domestic and international firms to invest in biotechnology and MedTech industries, fueling the demand for lifesciences real estate facilities. For example, the production-linked incentives scheme for the medical devices, drug intermediates, and active pharmaceutical ingredients industries has contributed to the demand for industrial parks and clusters, catalysing growth in both the industrial real estate market and ancillary services. 

These developments have underscored the growing need for life sciences R&D real estate in India, and the prospects are favourable. As per Savills India’s report spanning the present decade (2021-2030), India could generate demand for approximately 96 million sq ft of lifesciences R&D real estate, with market value estimates between $16 billion (Rs 1,200 billion) and $34 billion (Rs 2,550 billion). 

Central government’s push for lifesciences growth

Noticeably, this was not an occasional instance of the government intensifying its efforts to boost the lifesciences industry. Between 2018 and 2023, the Biotechnology Industry Research Assistance Council (BIRAC) stepped up through programs like the Biotechnology Ignition Grant (BIG) and the Biotechnology Industry Partnership Programme to develop and commercialise new technologies.

Similarly, BioRRAP (Biological Research Regulatory Approval Portal) and C-CAMP (Centre for Cellular and Molecular Platforms) are two pivotal initiatives giving a fillip to India’s biotechnology industry. BioRRAP, launched by the Government of India in 2021, serves as a streamlined, single-window portal for regulatory approvals in biological research, aiming to simplify and expedite the regulatory process for researchers and entrepreneurs. C-CAMP (established in 2009) functions as a premier innovation hub, facilitating cutting-edge research, providing incubation, and driving entrepreneurship in lifesciences.

Initiatives such as Atmanirbhar Bharat,’ ‘National Biotechnology Development Strategy (2020-2025), National Medical Devices Policy 2023, and ‘Pharma Vision 2020 and 2047’, are creating an environment for the industry to grow. Besides, regulatory measures promoting ease of business have made India a promising and lucrative destination for foreign investments, powering innovation and infrastructural progress in lifesciences. The pandemic has also nudged the world to adopt the ‘China Plus One’ policy and diversify sources of production and supply to increase resilience against future disruptions in biotech, pharma, and healthcare. This shift in perspective has resulted in several multinational players investing in lifesciences real estate in India. The presence of global pharma and biotech giants like Bristol Myers Squibb (BMS), Johnson & Johnson, Novartis, and Pfizer in India’s lifesciences hubs exemplify the lifesciences realty sector’s steady growth. 

State-led initiatives and lifesciences real estate

Alongside the central government, state governments have also been capitalising on the northward trajectory of the lifesciences industry by growing state infrastructure, bringing conducive policies to facilitate hassle-free business setups, and leveraging the availability of a large talent pool.

For example, Karnataka, India’s biotech capital, launched the Karnataka Biotech Policy 2022-2027 and the Karnataka Innovation Vision 2030 to drive an innovation-driven economy ahead. These policies focus on cluster formation and activation, cluster upgradation, advanced infrastructure and skill development. For example, Bengaluru Lifesciences Research (BLR) District, one of the five districts under a centrally-located megaproject in Bengaluru, is ready with fit-outs-ready labs for R&D and small-scale manufacturing for accelerated growth and advancement of home-grown and multinational lifesciences organisations.

Similarly, Telangana’s Genome Valley 2.0 and 3.0 are critical in encouraging clean manufacturing and innovation. Genome Valley will help expand the existing ecosystem to attract investment, create jobs, push innovation, facilitate global collaboration, and contribute to healthcare solutions, thus reinforcing the region’s position as one of the leading hubs for biotechnology and pharmaceuticals and making an economic and infrastructural impact. Maharashtra reinforces this with the Maharashtra Biotechnology Policy and Strengthening of Pharmaceutical Industry (SPI) 2022, providing a robust platform for biotechnology and pharmaceutical manufacturing in line with the central Production Linked Incentive (PLI) schemes.

Likewise, Gujarat, Tamil Nadu, Odisha, Jammu, and Kashmir are also following suit and developing infrastructure, such as biotechnology parks and zones equipped with state-of-the-art facilities to attract investments, enhance research and development capabilities, and promote innovation, aiming to be part of India’s ever-growing biotech, pharma, and MedTech growth story. India currently holds a 3-5 per cent market share in the global biotechnology industry. It is targeting growth to $300 billion by 2030, driven by substantial contributions from the pharmaceuticals and medical devices sectors too. Resultantly, the developments in lifesciences real estate are likely to be profound.

What’s on the horizon?

Steered by central and state support, India’s lifesciences real estate sector is becoming increasingly sophisticated, offering state-of-the-art facilities catering to this high-growth industry’s complex needs. This strategic infrastructure development will be decisive in stationing India as a leader in global lifesciences. The boom in the lifesciences realty sector will be significant in creating collaborative ecosystems that enable scaling operations and accelerate innovation.

Abbott’s significant expansion in the MedTech sector is a notable example in this context. The company faced challenges in scaling its operations in India due to regulatory complexities, lack of infrastructure, and the need for significant investment in manufacturing and R&D facilities. However, the Medical Device Policy and the Production Linked Incentive (PLI) schemes provided the much-needed fillip to Abbott’s progress. Factors like regulatory ease through the single window clearance system, infrastructural support through medical device parks, and policies promoting R&D collaborations enabled Abbott to enhance its presence, accelerating the growth of the lifesciences sector in India.

The turbo-mode growth of the lifesciences industry and tailored realty facilities also bring challenges such as integrating lifesciences real estate within broader urban planning and sustainability frameworks for long-term development. To move forward, concerted efforts are required to streamline regulatory approvals for need-specific lab setups, build sustainable infrastructure more, and align global developments with India’s broader economic and environmental goals. Addressing these issues will be momentous in the lifesciences the real estate sector and in positioning India as a global hub in this field.