The Department of Biotechnology (DBT) has called for proposals for its 10th batch of Small Business Innovation Research Initiative (SBIRI) to support innovative, early stage, pre-proof-of-concept research and development and commercialisation efforts of small scale biotechnology companies in the country.

The scheme aims to strengthen existing private units with in-house innovative R&D and to create opportunities for starting up technology-based or knowledge-based businesses in biotechnology and to stimulate technological innovation and product commercialization. The department also uses the scheme to support public-private partnership model between industry and public funded institutions.

The proposal has to be sent to the Biotech Consortium India Ltd (BCIL), promoted by DBT, major biotech companies and financial firms, before March 15 2009. The DBT has appointed BCIL as the SBIRI Management Agency assuring the confidentiality of the documents.

The scheme, which is designed in two-phased manner to induct the funds, is intended to provide early stage funding for high risk, innovative and ready-to commercialisation product proposals.

The funding structure covers both establishment of pre-proof of concepts of innovations and for product and process development as separate phases depending on the project cost and own resources brought in by the promoter to the project.

In the first phase, if the actual project cost is up to Rs 25 lakh, 80 per cent of the project cost will be available as a government grant and if the actual project cost is between Rs 25 lakh and Rs 100 lakh, 50 per cent of the project cost will be available as government grant subject to a minimum of Rs 20 lakh and maximum of Rs 50 lakh. If the proposal is for a project beyond Rs 100 lakh, in addition to the government's grant of Rs 50 lakh, the unit will be eligible for interest free loan up to 50 per cent of the amount by which the total project cost exceeds Rs 100 lakh, according to the government sources.

The phase two is proposed to provide soft loan up to Rs10 crore for a project as per its requirement. Soft loan up to Rs 100 lakh will carry a simple interest of one per cent while the interest rate will be two percent simple interest on the amount of loan beyond Rs 100 lakh. The role of public R&D institution at this stage too is critical, as many of the projects would continue to require technical support from the public funded R&D institutions. The government will support the partner in the public institution at this stage of R&D.

The proposals can be submitted solely by an industry or jointly by industry and national R&D organizations, universities and institutions. The private firm should be registered in India and at least 51 per cent of the company's shares should be held by Indian promoters, family and friends and the general public. The company should have a well established in-house R&D unit recognized by Department of Scientific and Industrial Research (DSIR) or have patent rights (National or International) on preliminary work done related to the proposed activity, elaborates an announcement from the DBT.