Industry executives say capital availability becomes particularly challenging after the seed stage. | Photo Credit: appledesign
India’s biotech innovation push gathers pace, but growth capital remains the missing link
India’s healthcare and biotech startup ecosystem is beginning to show signs of a shift from services, generics and contract manufacturing towards innovation-led businesses, but industry leaders say the availability of long-term growth capital remains the biggest hurdle in building globally competitive companies.
While early-stage support through incubators, academic institutions and government-backed programmes has improved significantly over the past decade, startups developing novel drugs, diagnostics and advanced therapies continue to face challenges in securing funding required for clinical development, manufacturing scale-up and commercialization.
“Even the large Indian pharma companies have done a lot of acquisitions in the last few years because they had cash on the books. The way to grow was to sort of add to that. But now they realise that’s not going to get them too far. The real focus has shifted towards innovation,” said Mayur Sirdesai, Partner and Co-Founder at Somerset Indus Capital Partners.
Historically, Indian pharmaceutical companies have focused on generics and services businesses, which carry lower risk and shorter development timelines. However, the next phase of growth is expected to be driven by intellectual property-led innovation, particularly in areas such as oncology, diagnostics and biotechnology.
Dr Vedha Sampath Kumar noted that much of the past decade was spent building the foundational ecosystem of research institutes and incubators. “The ecosystem is only now beginning the 1-to-10 challenge of moving from isolated success stories to a self-sustaining innovation hub,” she said. She also highlighted the shortage of domestic GMP-certified pilot plants and scale-up infrastructure needed to take innovations from laboratories to commercial production.
Industry executives say capital availability becomes particularly challenging after the seed stage.
“The biggest struggle has been the next group of funding which will take it to a commercial scale. And that mantle has not really been taken over by the private sector,” Sirdesai said.
Amit Mookim, CEO of Immuneel Therapeutics, echoed similar concerns. “The biggest need is patient, long-term capital aligned with biotech development cycles,” he said. While seed funding availability has improved, growth-stage investors capable of supporting clinical development and commercialization remain limited, particularly in advanced areas such as cell and gene therapies.
According to Sirdesai, dedicated sector-focused funds will be critical to unlocking the next phase of growth. “You are slowly seeing that ecosystem evolve. But it is still not at a critical mass yet. It will require dedicated VC funds focused specifically on biotech, medtech, healthcare innovation and deep tech.”
Recent global validation of Indian innovation, including large licensing and partnership deals involving domestic biotech firms, has begun attracting investor attention. Yet industry participants believe meaningful change will take time.
“I think it’s realistically a five-to-ten-year story. This transition is not going to happen in one or two years,” Sirdesai said. “Over the next five years, you will start seeing some meaningful innovations emerge.”
Areas such as oncology, point-of-care diagnostics and affordable biotechnology solutions are expected to be among the biggest opportunities as India seeks to build globally relevant healthcare innovation companies.
“But I think it’s time to take that risk because you can become a world leader in certain categories,” Sirdesai added.
Published on June 15, 2026
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