Biotechnology is a knowledge-driven technology, which needs to be driven by a flow of new ideas and concepts in the development of new tools for research, new processes for manufacturing and innovative business models. Rapid responses are needed to meet the challenges as they unfold and there is a requirement for specialized personnel and centres of excellence for R&D.

The policy goal for the next decade is to facilitate the availability of scientific and technical human resource in all disciplines relevant to the life science and biotechnology sector. In order to build a successful biotechno-logy sector, large talent pools are required in multiple scientific disciplines such as molecular and cell biology, chemistry, physics, engineering, bioinformatics, medicine, agriculture, microbio-logy, technology transfer & commercialization, bioentreprise & biofinancing and intellectual property rights management.

Product and process development are inter-disciplinary in nature and deficiencies in specific areas may weaken the whole sector. The key issue is the manner in which to create an effective interface across disciplines. Reliable estimates of human resource availability for the next 10 years are required. Expert consensus indicates that there is adequate enrollment currently at the post-graduate and under-graduate levels, however the quality is inconsistent.

Areas such as intellectual property rights, regu-latory issues and industrial training have received inadequate attention. There is a consensus that there is an urgent need to augment the number of Ph D programmes in the Life Sciences and biotechnology. A strong pool of academic leaders is key to sustained innovation.

STRATEGIC ACTIONS:

(i) National Task Force on education & training
- A National Task Force will be created to formulate model undergraduate and postgra-duate curricula in Life Sciences keeping in view, future needs. The said curricula must address the underlying need for multidisciplinary and inter-disciplinary learning and the appropriate stage for biotechnology training.

(ii) Need assessment
- There would be need assessment in 2005 for the next five years and close monitoring during the period for interim changes.
- A 10-year perspective plan for human resource will be prepared every five years.

(iii) Curriculum development
- Course curricula will be reviewed and improved in consultation with industry and research establishments and standard e-learning modules will be developed for specific skill areas such as IPR, regulations, and bioentreprise.
- Hands on exposure to M Sc biotechnology students will be enhanced through an extended industry internship as well as through short-term placements at CSIR and other appropriate National Institutes.
- Dual degree programmes in biotechnology that include regulatory matters, IPR and bio-enterprise management will be encouraged and supported by the Department of Biotechnology.
- Emphasis will be given on training of high quality technicians and technologists in skills required by the industry by establishing regional training centres at diploma, graduate and postgraduate levels.

(iv) Quality improvement
- An accreditation mechanism will be put in place for ensuring minimum standard of education and training at the post graduate and undergraduate levels. Base requirements for teaching and laboratory infrastructure will be specified and enforced.
- Teachers training programs will be taken up by creating regional teachers training centres

(v) Strengthening of teaching and R&D in life sciences and biotechnology in the university system
- Strengthening R&D in Life sciences and biotechnology in the university system will be accorded high priority. This is considered important for improving the quality of education and providing exposure to new technologies for students at various levels. Specific mechanisms to achieve the goal will include
- Creation of inter-disciplinary centres of excellence with worldclass infrastructure in key areas
- Programme support to encourage inter-departmental networking
Visiting professorship and creation of industry sponsored chairs in partnership with the Department of Biotechnology.

(vi) Attracting talent to life science and biotechnology
- Bright students will be attracted to take up careers in biology and biotechnology through special scholarships. Summer assignments at Academic and Industry research laboratories will be introduced at the school level to create interest in the fields of biotechnology and biology
- Women scientists will be encouraged to take up careers in biotechnology. Service conditions will be liberalized for women to be able to return to research/academics after maternity breaks.

(vii) Creating science & technology leaders for the industry
- The number of Ph D fellowships offered by the Department of Biotechnology will be increased to 200 per annum
- Public-private partnerships will be encouraged in Ph D programmes through creation of the 'Bio-edu-Grid'- a network of universities and industries facilitating pooling of resources.
- Masters degree level professionals in industry will be encouraged to undertake Ph.D. programmes while retaining their jobs through industry university tie-ups.

(viii) Arresting and reversing brain drain
- As mentioned earlier, the number of postdoctoral fellowships offered by the Department of Biotechnology will be increased to 200 per annum in order to attract talent.
- Outstanding young investigator grants in biotechnology will be introduced. This will provide a package including salary support, research grant, equipment and opportunities to attend national and international conferences. The salary support under the scheme will be on par with that of entry-level faculty positions.
- Information on availabi-lity of positions in education/research establishments and industries will be provided on a website to facilitate employment of scientists with specific skills at appropriate positions.
- A database of scientists working in different areas of biotechnology within and outside the country will be created to utilize the expertise appropriately.

(ix) Enabling working conditions for scientists to undertake industry oriented research
- Lateral mobility of scientific personnel: Scientists working at universities and research institutions may be allowed to work in industries for commercialization of their research efforts. This could be in the form of secondment or consultancy with industry or by a sabbatical for three years during the working life of scientists
- Dual/adjunct faculty positions: Researchers working in university / research institutions may be allowed to hold positions in the industry and vice-versa
- Joint salary support: Faculty employed in academic institutions may be allowed to hold positions for a period of time in which their salary is contributed both by the industry and the academic institution on a mutually agreed basis. (Such an arrangement will work well only if the teaching requirements of the academic institutions are made obligatory).
- Rapid travel grants: Rapid travel grants scheme for approval within two weeks for young scientists to interact with mentors and industry collaborators would be initiated.
- Institute innovation grants through the Department of Biotechnology to fund academic researchers to develop their concepts into patentable and more importantly licensable technologies. Such grants may be utilized for the purpose of providing additional infrastructure and manpower, patenting costs as well as costs related to proof of concept studies. These steps will ensure that the large available resources of human talent in biotechnology are supported and this will guarantee the progress of the biotech sector.

INFRASTRUCTURE DEVELOPMENT AND MANUFACTURING

The strength of a biotechnology company lies in up scaling a number of proven technologies - diagnostics, vaccines, products, and processes - for fine-tuning and large-scale production. While Indian industry is strong in product development and marketing for commercial benefits, biotechnology in India still lacks the infrastructure required to take up R&D in areas like molecular modeling, protein engineering, drug designing, immunological studies, preclinical studies, clinical trials, etc. In order to get the best from public and privately funded biological/biotechnological research, it is imperative to utilize the infrastructure generated optimally for societal benefits.

The concept of contract research organizations (CROs), contract manufacturing organizations (CMOs), contract packagers, lab services providers etc., is steadily taking shape in India. In the area of biomanufacturing, industry estimates that the market for biogenerics in India is expected to see a 43 percent jump from Rs 308.50 crore in 2001 to Rs 1,305.7 crore in 2005 and projected to reach Rs 1,864.3 crore by 2007 registering a growth of 19 per cent. India's strengths lie in the availability of educated and skilled manpower, proficiency in English, low capital and operational costs and the proven track record in meeting international standards of quality. There is ample proof that the Indian companies are committed to global standards. According to reports, outside of the US, India ranks the highest with 61 USFDA-approved plants and in excess of 200 GMP certified pharmaceutical manufacturing facilities.

STRATEGIC ACTIONS:

(i) Department of Biotechnology will act to facilitate a Single Window Clearance mechanism for establishing Biotechnology plants.
(ii) Encourage private participation in infrastructure development like roads, water supply and effluent treatment.
(iii) Depositories of biological materials will be created in partnership with industry on IDA model for agriculturally important organisms, medically important organisms, plasmids, cosmids and constructs of special nature generated with adequate human interventions
(iv) State-of-the-art large animal house facilities with GLP will be created for testing candidate vaccines and biotherapeutics. Testing facilities will be created for GMO/LMO

PROMOTION OF INDUSTRY AND TRADE

The emergence of India as a global player in the biotech sector requires government to play the role of a champion and foster an international competitive environment for investment and enterprise development. India's strategy must be to get more value from its R&D investment and from IPR generation. The biotechnology sector has in recent years witnessed accelerated growth. With approximately 200 industries the growth of the biotech sector in India has been rapid. Current estimates indicate that the industry grew by 39% annually to reach a value of US$ 705 million in 2003-2004. Total investment also increased in 2003-2004 by 26% to reach US$ 137 million. Exports presently account for 56% of revenue. Currently the biopharma sector occupies the largest market share of 76% followed by bio-agri 8.42%, bioservices 7.70%, industrial products 5.50% and bioinformatics 2.45%. The bioservice sector registered the highest growth (100%) in 2003-2004 with bioagri 63.64% and biopharma 38.55%. The current policy review envisages an annual turnover of US$ 5 billion by 2010. India has to develop its own biotechnological and pharmaceutical products to ensure quality and affordability for global trade.

In addition to opportunities in drug discovery and development there are significant openings to provide services to the worldwide biotech and pharmaceutical industries and to leverage low cost high quality manufacturing with a global discovery potential. Capitalizing on these opportunities would create many new valuable jobs in India as we have seen in the outsourcing and service industry.

However, to achieve the targeted business volume, several new challenges have to be met. These are predictable and enabling policies, increased public and private support for early or proof-of-concept stage of product development; improved communication among stakeholders in the sector, public-private partnerships, integration of the Indian biotech sector globally; and improved infrastructure. The vision is to maximize opportunities in the area of contract research, manufacturing and to promote discovery and innovation.

The biotech industry being capital intensive in nature has historically relied on venture capital from public and private sources. India needs to provide active support through incubator funds, seed funds and provision of various incentives in order to develop the biotech sector. In a highly competitive and fast moving business environment, innovative capacity is an important determinant of the ability to create a continuing pipeline of new products and processes.

Innovation covers knowledge creation (R&D), knowledge diffusion (education and training) and knowledge application (commercialization). Innovation is not a one-time event; instead, it has to continuously respond to changing circumstances for creating sustainable growth. Innovation is measured in terms of external / domestic patent applications; human capital devoted to R&D, government expenditure on R&D proportionate to country's GDP, business funded expenditure on R&D, indigenous technologies standardized, demonstrated and transferred to industry for commercialization; and the number of spin off companies created.

Clear government policies for promotion of innovation and commercialization of knowledge will propel the growth of the biotechnology sector.

STRATEGIC ACTIONS:

(i) Innovation:
- Basic and translational research in key biological processes and new materials will be supported as innovation for tomorrow. Access to the knowledge generated will be improved by supporting knowledge and social networks among stakeholders so that those with appropriate skills can convert the research output into useful products and processes. Research to promote innovation must be supported increasingly on a cooperative rather than a competitive basis. This requires effective communication among science agencies, research institutions, academia and industry.
- To promote India as a hub of innovation, a network of relevant stakeholders should be developed. Public investment should be used as a catalyst to promote such clustering and networking as this can lead to enhanced creativity by sharing of expertise, resources and infrastructure.

- Availability of human resource would be ensured at each phase of the product cycle. Strengthening technology transfer capa-city. It is proposed to create several national/regional technology transfer cells (TTC's) over the next 5 years to provide high caliber, specialized and comprehensive technology transfer services.

The services would include: evaluating technology and identifying potential commercial uses, developing and executing and intellectual property protection strategies identifying potential licensees and negotiating licenses. Each TTC would service a cluster of institutions in a region or a large city. Optimal delivery of services by the TTCs requires professionals with background in industry and science, wide networks, an external focus and high level licensing skills. The best practices for effective technology transfer will be benchmarked. The skills of existing technology transfer professionals will be upgraded by a combination of specialized training courses, including linking to important programmes redesigning the incentives and career paths for posting. Scientists and other innovators shall be equipped with a better understanding of markets and commercialization pathways, the process of technology transfer, the strategy of protecting intellectual property rights and industrial licensing.

(ii) Fiscal and trade policy initiatives
Biotechnology firms are by far the most research intensive among major industries. On an average the biotechnology sector invests 20-30 % of its operating costs in R&D or technology outsourcing. Government support, fiscal incentives and tax benefits are therefore critical to this sector. These measures will also help to capitalize on the inherent cost effectiveness of the Indian biotech enterprise. The suggested interventions include:
- Exemption of import duties on key R&D, contract manufacturing / clinical trial equipment and duty credit for R&D consumer goods to enable small and medium entrepreneurs to reduce the high capital cost of conducting research.
- Extending the 150 % weighted average tax deduction on R&D expenditure under section 35 (2AB) until 2010 and to permit international patenting costs under this provision and enable eligibility of expenditure incurred with regard to filing patents outside India for weighted deductions u/s 35 (2 ab)
- Enable lending by banks to biotech companies as priority sector lending. Currently banks are almost averse to lending to young biotech companies. In order to encourage banks to lend and provide banking services to the biotech sector, a significant push through appropriate policy guidelines from the Reserve Bank of India is necessary. Currently lending to agri-businesses as well as investment in Venture Funds by banks is categorized as Priority Sector Lending. Biotech as a business has similar characteristics in terms of risk as well as gestation time lines and it is therefore recommended that lending to Biotech be also categorized as Prio-rity Sector lending.
- Remove customs duty on raw materials imported into India, where the finished product is imported duty-free. Life Saving Drugs imported and sold in India are exempted from paying cus-toms duty; whereas raw materials for diagnostics and other pharmaceutical biotech products manufactured in India are levied customs duty. To promote the indigenous manufacturing industry and make it competi-tive globally, raw materials imported by Indian manufacturers should be eligible for Duty Drawback.
- Rationalization of import and export of biological material is considered critical for clinical research and business process outsourcing.
- Simplification and streamlining of procedures for import, clearance and storage of biologicals, land acquisition, obtaining environmental and pollution control approvals would be simplified and streamlined within shorter time frame lines through consultations with various central and state government departments.
- As an effective regula-tory mechanism has been put in place though recent interventions, Foreign Investment Promotion Board (FIPB) approval for equity investment may no longer be necessary.
- Joint R&D collaboration and generation of joint IP though global partnerships would be fostered.
- International trade opportunities would be promoted to guide R&D investment Indian biotech strengths would be aggressive by pro-moted globally.
- Efforts would be made to remove hurdles for contract research especially for input output norms and tax on revenue generated through contract research / R&D.
- Easy access to information, regarding legislation and rules and regulations for transboundary movements of biologicals would be promoted.
- Current standards and safety of products would be enhanced.
- Efforts would be strengthened to promote acceptance of Indian regulatory data internationally.
- Research, trade and industrial partnership would be fostered at regional and sub-regional levels.
- A "cluster" approach would be encouraged to operations. One significant features of the industry is the fluidity and variety of its intercompany relationships, traditionally much greater than in other industries. It has relied to a considerable degree on contracting and outsourcing, especially "upstream" in R&D through various licensing arrangements and "downstream" through co-marketing agreements.
- Collaborative knowledge networks would be promoted. Expanded sharing of information, including creation/use of collaborative knowledge networks (CKN), can greatly enhance a company's performance under a cluster approach. Managing the many external relationships is complex. Flexible and pervasive communications systems that allow information to flow effortlessly within and between contracting organizations will provide the key to success. Increasingly, IT advances, including webbased approaches, will provide the foundation for these systems.

(iii) Public investment for promotion of innovation and knowledge commercialization
Availability of financial support for early phase of product development to establish proof-of-principle is the key to sustaining innovation. In this context, it is proposed to institute 'Small Business Innovation Research Initiative' (SBIRI) scheme through the Department of Biotechnology in 2005-06 for supporting small and medium size enterprises as a grant/loan. Companies with up to 1000 employees will be eligible. 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.

SBIRI PHASE - I

The funding in this 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% 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 should 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.

SBIRI PHASE - II

It is expected that some of the proposals funded with SBIRI Phase-I will establish the proof-of-concept. At this stage, the ability of the project to get venture capital funding improves. Such projects will be eligible for Phase-II funding. Some projects could be eligible for direct phase-II support. It is proposed to provide soft loan at this stage for product development and commercialization at an interest rate of 2%. The role of public R&D institution at this stage too is critical. The partner in the public institution at this stage will get the R&D support as grant. · Small and medium knowledge-based industries in biotech sector will be encouraged to avail of equity support from the SME Growth Fund of Small Industries Development Bank of India (SIDBI).

(iv) Code of best practice for disclosure guidelines
Setting up a 'Code for Best Practice for Disclosure Guidelines for the Indian Biotech Industry'. This Code will be a part of the General Listing Requirements and Disclosure Guidelines and will be in conjunction with SEBI's General Listing Rules and Disclosure Guidelines.

BIOTECHNOLOGY PARKS & INCUBATORS

Establishing biotechnology parks for the growth of the biotechnology industry is essential either through public-private alliance or public/private sponsorships. With its large human resource in molecular biology, microbiology, biochemical engineering, synthetic organic chemistry, chemical engineering and allied branches of engineering and strong institutional base at the universities, CSIR, ICMR and ICAR, India is well placed to support a number of biotech parks. Biotechnology Parks can provide a viable mechanism for licensing new technologies to upcoming biotech companies to start new ventures and to achieve early stage value enhancement of the technology with minimum financial inputs.

These biotech parks facilitate the lab to land transfer of the technologies by serving as an impetus for entrepreneurship through partnership among innovators from universities, R&D institutions and industry. Basic minimum components for parks should include research laboratories for product development, multi-purpose pilot facility for manufacturing and process development, quality control and validation of technologies, common effluent treatment plant, a GLP Animal House, a recognized human resource training centre, administrative support centre etc.

The biotech parks should be located so as to be easily accessible for all the stakeholders, tenants, academia with connecting roads, water and power supply and should also attract less administrative clearances from the government.

STRATEGIC ACTIONS:

(i) The Department of Biotechnology will promote and support at least 10 biotech parks by 2010. Each park will necessarily meet the qualifying criteria related to the characteristics of the location, a viable business plan, management strategy and a clear definition of the partners and their roles.

(ii) The Department of Biotechnology will support creation of incubators in biotech parks promoted by a private industry or through public-private partnership in the form of grant upto 30% of the total cost or upto 49% in the form of equity.

(iii) It is proposed that a central body for Biotechnology Parks Society of India (BPSI) be set up for the promotion of biotechnology parks in the country on the same lines of the Software technology Parks of India (STPI). The BPSI should be run by professionals having experience in the areas of biotechnology, knowledge in Acts and Rules relevant to biotechnology and management skills. The existing parks can become members of these new biotech parks. The BPSI would be responsible for evaluating the project proposals and advising the Department of Biotechnology on the funding pattern; facilitating industries in obtaining industrial, environmental and other relevant approvals from the central government; making recommendation regarding fiscal incentives to be granted to the biotechnology parks; providing guidance to the venture capital institutions on investment in biotech parks; providing accreditation to the parks etc.

(iv) Concessions to biotech companies located in biotech parks Biotech companies located at biotech parks are eligible for benefits as per the recent changes in the Foreign Trade Policy:
- Duty free import of equipment, instruments and consumables.
- Tax holiday under Section 10A/ 10B of the Income Tax Act
- A scheme will be put in place for operationalising of the incentives to biotech units located in biotech parks.

As a part of this scheme biotech company located in biotech parks to be allowed a five-year time frame to meet the export obligation norms under the SEZ scheme. This measure helps to address the long and unpredictable gestational time lines that are inherent to biotech product development.

REGULATORY MECHANISMS

It is important that biotechnology is used for the social benefit of India and for economic development. To fulfill this vision, it has to be ensured that research and application in biotechnology is guided by a process of decision-making that safeguards both human health and the environment with adherence to the highest ethical standards. There is consensus that existing legislation, backed by science based assessment procedures clearly articulates rules and regulations that can efficiently fulfill this vision. Choices are required to be made that reflect an adequate balance between benefit, safety, access and the interest of consumers and farmers. It is also important that biotechnology products that are required for social and economic good are produced speedily and at the lowest cost. A scientific, rigorous, transparent, efficient, predictable, and consistent regulatory mechanism for biosafety evaluation and release system/protocol is an essential for achieving these multiple goals.