Indian R&D a growing competitor for Europe, finds report

July 8, 2004

Brussels, 07 Jul 2004

A recently published report has identified India as an emerging hub for collaborative and outsourced research and development (R&D) in drug development, biotechnology and chemicals.

The report, by Ernst and Young, states that Indian pharmaceutical companies are adopting alternative business models to draw on competition and opportunity and are shifting from business-driven research to research-driven business.

'India's position as a biotech player is assuming greater eminence as the country continues to build critical mass in terms of skills and capabilities. An analysis of the year's events clearly indicates that Indian biotech companies are getting their fundamentals firmly in place, business models are maturing, and product commercialisation capabilities are improving' states the study.

The Ernst and Young report follows a European Commission communication published on 16 June, which called for increased cooperation between the EU and India in various fields including biotechnology. 'The EU is the world's second largest centre of biotechnology research activity after the USA. Indian biotechnology has been advancing rapidly in the past few years. Its next challenge is to successfully integrate the Indian biotechnology industry into the global biotechnology innovation system,' noted the Commission report.

Indeed, India's nascent biotechnology industry is expected to generate five billion dollars (four billion euro) in revenues and create over one million jobs in the next five years, according to Ernst & Young's 2004 'Progressions' report.

'With the global industry's current focus on accelerating productivity, collaboration is the way forward for several American and European companies faced by resource constraints. With its abundant high quality-low cost technical manpower, India is emerging as a partner of choice,' explains Utkarsh Palnitkar, health sciences industry leader at Ernst & Young India.

According to the report, the situation is similar in the pharmaceutical industry: 'Countries that can combine lower cost manufacturing with adequate protection of intellectual property are well-positioned to attract large pharmaceutical companies, India being a prime example.'

Indications are that several Indian pharmaceutical companies are now holding their own on the world stage. With a pool of trained chemists, an excellent track record of innovation and US Food and Drug Administration approved manufacturing facilities, the report notes that savings of between 30 and 50 per cent are now possible in India. Indeed, 20 per cent of all drugs coming into the US market come from India, a higher percentage than Spain, Italy, Israel and China.

CORDIS RTD-NEWS / © European Communities

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