Biotechnology is going to play a key role in the pharmaceutical industry in the years to come in India and worldwide. Pharmaceutical companies and the national governments have realized the potential of biotech drugs considering relatively lower costs and better efficacy of use. Stem cell technology is the latest branch of this new science and it is offering hope for a number incurable diseases. The interest being shown by the Central government and some of the state governments, of late, in encouraging biotech entrepreneurs and biotech research has to be seen in the background of this. The Centre is currently finalizing a detailed national policy for the biotech sector. Some of the state governments like Karnataka, Andhra Pradesh, Gujarat and Maharashtra are also actively pursuing a number of initiatives in this area. The Department of Biotechnology has proposed a string of fiscal incentives and policy initiatives for the promotion of R&D in biotech sector. It has called for the extension of 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. This will make domestic biotech firms eligible to claim the expenditure incurred with regard to filing patents outside India. The department has also proposed exemption of import duty on key R&D, contract manufacturing and clinical trial equipments and duty credit for R&D consumer goods can also help small and medium entrepreneurs to reduce the high capital cost of conducting research. Allowing 100% foreign direct investment through automatic route is another key proposal considered by the department to attract overseas investments into biotech sector. Undoubtedly these are some of the best proposals any industry can think of getting from the government. The successful conclusion of Bangalore Bio 2005 with active participation by the Central, state ministers and top government officials has adequately highlighted the importance the government gives to this sector. The Bangalore Bio had participation from 15 countries, 9 states, 800 delegates and 110 exhibitors. The potential of biotech sector to create large scale employment is one other reason for the government to offer such large scale fiscal incentives. The Association of Biotechnology Led entrepreneurs has estimated that Indian biotech sector would be able to generate 1 lakh jobs in the next five years.

A fast growing segment in the biopharmaceutical sector is human vaccines. The demand for vaccine is fast expanding because of a steady growth in government immunization programmes world over. Procurements of various vaccines by global organizations like WHO,UNICEF and GAVI have increased substantially over the years. This has attracted some of the top international pharma companies like Chiron,GSK and Aventis to seriously look into the vaccines market in recent years. And they consider India as a major hub for manufacturing and export of various types of vaccines. Chiron has a base in Gujarat, GSK's vaccine facility is getting ready in Nashik by the end of this year and Aventis Pasteur is already a supplier. Merck is another MNC thinking of setting up a manufacturing facility soon. In short, there is a real boom time for biotech industry in India. It is alright that the government is offering all kinds of support for the growth of this industry segment. What should not be ignored here is the need for laying down specific standards of safety for all biotechnology products to be marketed in the country as many small and medium scale entrepreneurs are also entering the fray.