The Department of Biotechnology (DBT) is planning to announce a 'Small Business Innovation Research Initiative (SBIRI)' for enabling public investment in promotion of innovation and commercialisation of knowledge in biotech sector.
The SBIRI, expected to be initiated during the current year itself, would offer financial support to small and medium size enterprises as grant / loan for carrying out early phase product development. Companies with up to 1000 employees will be eligible to avail the benefits of the scheme.
According to the proposed plan, the scheme will support pre-proof of concept, early stage innovative research and provide mentorship and problem solving support in addition to the grant / soft loan. The SBIRI scheme will operate in two phases of innovation and product development.
The funding in the first stage will be provided for highly innovative, early stage, pre-proof-of-concept research. Preference will be given to proposals that address important national needs. The maximum amount of funding to an enterprise will be limited to Rs 50 lakh with not more than 50 per cent of it going as grant and the remaining as an interest free loan. For projects to be considered at this stage, though a partner from a public R&D institution would be considered important, it will not be a mandatory requirement for those companies that have good quality scientists. This is expected to encourage high quality scientists to agree to work in small and medium biotech companies, a change from our traditions. The R & D requirement of the public institution will be met through a grant.
Once the projects funded with SBIRI Phase-I succeeds in establishing the proof-of-concept, they will be eligible for venture capital funding and therefore can apply for Phase II funding. Depending upon the proposals, some projects could be eligible for direct phase-II support also. DBT plans to provide soft loan at this stage for product development and commercialization at an interest rate of 2 per cent. Since the role of public R&D institution at this stage is critical, the partner in the public institution at this stage will get the R&D support as small and medium knowledge-based industries in? grant. Biotech sector will also be encouraged to avail of equity support from the SME Growth Fund of Small Industries Development Bank of India (SIDBI).