Government schemes bolster startup growth in India’s pharmaceutical sector

The Government of India has rolled out several initiatives to boost startups, with a significant focus on the pharmaceutical sector. The Department of Pharmaceuticals recently launched the Scheme for Promotion of Research and Innovation in Pharma-MedTech sector (PRIP), which targets startups through its Component BIII. Out of 125 research projects identified in six priority areas, 50 are specifically designated for pharmaceutical startups.

The broader Startup India Initiative, launched on January 16, 2016, has been instrumental in fostering innovation and encouraging investments across various industries, including pharmaceuticals. This initiative encompasses three flagship schemes: the Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS).

According to the statement published by PIB, the Biotechnology Industry Research Assistance Council (BIRAC), under the Department of Biotechnology, offers funding assistance through initiatives like the Biotechnology Ignition Grant (BIG), Sustainable Entrepreneurship and Enterprise Development (SEED), and Launching Entrepreneurial Driven Affordable Products (LEAP) schemes. These programs provide funding ranging from INR 30 Lakhs to INR 100 Lakhs per startup, aiding in refining ideas, establishing proof-of-concepts, piloting, and commercialising products and technologies. BIRAC also supports innovation and research in biotechnology through the i4 and PACE programs.

As of June 30, 2024, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognised a total of 1,40,803 entities as startups, with 2,127 of these in the pharmaceutical sector.

Under the Startup India initiative, several schemes provide substantial support to startups at various business stages. The SYSFS, launched in FY 2021-22 with a corpus of Rs. 945 crore, has approved Rs. 862.84 crore for 205 incubators as of June 30, 2024. The FFS, managed by the Small Industries Development Bank of India (SIDBI), has committed Rs. 10,804.7 crore to 138 Alternative Investment Funds (AIFs) registered with the Securities and Exchange Board of India (SEBI), which then invest in startups. The CGSS, operational since April 1, 2023, facilitates collateral-free loans to DEPOSIT-recognised startups through eligible financial institutions. As of June 30, 2024, 182 loans amounting to Rs. 426.09 crore have been guaranteed to beneficiary startups.

Additionally, the pharmaceutical sector in Uttar Pradesh has seen the establishment of 214 new industries over the past three years, with 38 units in drugs and formulations.

Union Minister of Chemicals and Fertilisers, Jagat Prakash Nadda, shared this information in the Rajya Sabha, emphasising the government’s commitment to fostering a robust startup ecosystem in India.