From lack of government funding for high-risk research projects to strict laws related to biodiversity and currency management, biotech entrepreneurs raised many concerns with the government at a recent startup conference – Indian Global Innovation Connect – organized by Smadja & Smadja Advisory in Bengaluru.
The biotech industry, which only managed to raise $145 million out of the $73 billion raised by the entire startup sector in the last fiscal year, wants more government help for initiatives aimed at supporting future entrepreneurs.
Except for the creation of the Biotechnology Industry Research Assistance Council (BIRAC), the government has taken little initiative in favor of research in this field, said Anandi Iyer, director of the Fraunhofer Office. India, a research organization based in Germany.
“There is not enough government funding for high-risk research. Only seed-level funding is there,” Iyer said.
The healthcare startup’s founder, Jagadeesh Gopalan, agreed, pointing out that there was no Y-combinator-like accelerator for Indian startups.
“At least Rs 10,000 crore should be spent on a good accelerator,” said Gopalan, who is a senior professor at the Indian Institute of Science and co-founder of Ykrita Life Sciences.
It is also necessary for people to change the way they view research and development.
“Indian companies see R&D expenditure as a cost but not as an investment. That has to change,” Iyer said.
Others pointed to the need for major regulatory and legal reforms.
“The Indian Biodiversity Act does not allow any foreign company to tap into Indian biological life to innovate and develop new solutions. According to the law, any company whose single share is owned by a foreigner is considered a foreign company. said Shrikumar Suryanarayan, co-founder of Sea6 Energy, a technology developer that harnesses the potential of the oceans.
Suryanarayan added that laws like the Biodiversity Act and FEMA (Foreign Exchange Management Act) were too strict in their nature, thus pushing entrepreneurs to establish their bases outside India.
“Because of the strict laws, you see a lot of innovators abandon cumbersome procedures and move to Singapore or Delaware,” he said.
One such company that had to weather India’s funding winter was Bugworks, a clinical-stage biopharmaceutical company that researches and develops affordable and accessible antibiotics.
“We raise about 95% of our funds from outside India,” said Anand Anandkumar, co-founder of Bugworks. He hoped big pharma with lots of money could invest in nascent entrepreneurial initiatives to take the industry to the next level.