New Delhi: The number of start ups in the pharmaceutical sector has more than doubled in three years from 2021, while the sector has a meagre 1.5 per cent representation in the total number of startups in the country till the middle of this year. The last three years has seen the setting up of 1,397 start ups in the sector, which are recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).
According to the ministry of chemicals and fertilisers, there were 283 start ups in the pharmaceutical sector set up during the year 2021 and recognised by DPIIT, which has reported a growth to 451 start ups in 2022 and to 663 in 2023, doubling the number of start ups in the sector.
As of June 30 2024, the DPIIT has recognized a total of 1,40,803 entities as startups, of which 2,127 are from the pharmaceutical sector.
Commenting on the efforts from the government to encourage start ups in the sector, minister of chemicals and fertilisers J P Nadda recently said in the Parliament that the Department of Pharmaceuticals has launched a Scheme for Promotion of Research and Innovation in Pharma-MedTech sector (PRIP). Under Component BIII of the PRIP scheme, 50 of 125 research projects in the identified six priority areas are for the startups in the pharmaceuticals sector.
“The Government of India has implemented several schemes to encourage startups across various sectors including the pharmaceutical sector,” he said in the Rajya Sabha in the end of July, this year.
This includes Startup India Initiative, launched on January 16, 2016, which aims to foster innovation and encourage investments across various industries, including the pharmaceutical sector. The initiative includes three flagship schemes viz., Fund of Funds for Startups (FFS); Startup India Seed Fund Scheme (SISFS); and Credit Guarantee Scheme for Startups (CGSS).
Biotechnology Industry Research Assistance Council (BIRAC) under Department of Biotechnologies offers funding assistance through initiatives such as the Biotechnology Ignition Grant (BIG), Sustainable Entrepreneurship and Enterprise Development (SEED), and Launching Entrepreneurial Driven Affordable Products (LEAP) schemes. The funding ranges from INR 30 lakhs to INR 100 lakhs per startup, enabling them to refine their ideas, establish proof-of-concepts, pilot, and commercialize their products and technologies. BIRAC also promotes innovation and research in biotechnology through the i4 programme and the PACE programme.
Commenting on the funding support offered to the overall start up ecosystem in the country, he added that under the flagship schemes of Startup India initiative, support is extended to startups across all sectors and industries at various stages of their business cycle.
SISFS provides financial assistance to seed-stage startups through incubators. The scheme was launched in FY 2021-22 for a period of 4 years with a corpus of Rs. 945 crore. As of June 30, 2024, under SISFS, Rs. 862.84 crore has been approved for 205 incubators. FFS has been established to catalyse venture capital investments and is operationalized by the Small Industries Development Bank of India (SIDBI). SIDBI provides capital to Alternative Investment Funds (AIFs) registered with Securities and Exchange Board of India (SEBI), which in turn invest in startups.
As of June 30, 2024, under FFS, Rs. 10,804.7 crore has been committed to 138 AIFs. CGSS is implemented to enable collateral-free loans to DPIIT recognised startups through eligible financial institutions (Member Institutes – MIs). The scheme is operationalized by the National Credit Guarantee Trustee Company (NCGTC) Limited and has been operational on a pilot basis from April 1, 2023. As of June 30, 2024, 182 loans amounting to Rs. 426.09 crore have been guaranteed to beneficiary startups, added the Minister.
