India is among the first few countries in the developing world to have recognized the importance of biotechnology as a tool for advancing growth in the agriculture and health sectors. Biotechnology has now emerged as a dominant sector in India. Total investments in the sector crossed USD 580 million during 2006-2007. Biotechnology encompasses many fields from bio-pharma to bio-agriculture. A well defined globally harmonized regulatory framework through stringent Patent law, Good Laboratory Practices, Good Manufacturing & Clinical Practices and a skilled pool of more than 15,000 scientists, 500,000 graduates, 12,000 doctorates in chemistry and 115,000 postgraduates in sciences makes India a favoured destination for collaborative R&D, bioinformatics, contract research, manufacturing and clinical research. Improving human subject protection and increasing international acceptability of Indian data further strengthen India’s position as a preferred clinical outsourcing destination.

Department of Biotechnology, Ministry of Science and Technology, Government of India is the nodal department to administer the subject. FDI policy does not classify biotechnology as a specific industry. FDI up to 100% is allowed, subject to certain conditions, under the automatic route in pharmaceutical and drug industries. However, in case of industries involved in recombinant DNA technology and specific cell/tissue formulations, FIPB approval is required. The Environment Protection Act, 1986 is the basic sectoral statute in the biotechnology sector.