Business Potential for Agricultural Biotechnology - Asian Productivity ...

Potential for Agri-biotechnology Products in India
in other industries. It has relied to a considerable degree on contracting and outsourcing,
especially “upstream” in R&D through various licensing arrangements and “downstream”
through co-marketing agreements.
• Promotion of collaborative knowledge networks. Expanded sharing of information, including
creation/use of collaborative knowledge networks (CKN), can greatly enhance a
company’s performance under a cluster approach. Managing the many external relationships
is complex. Flexible and pervasive communications systems that allow information
to flow effortlessly within and between contracting organizations will provide the key to
success. Increasingly, IT advances, including web-based approaches, will provide the
foundation for these systems.
Public Investment for the Promotion of Innovation and Knowledge Commercialization
Availability of financial support for the early phase of product development to establish
proof of principle is the key to sustaining innovation. In this context, it is proposed to institute a
Small Business Innovation Research Initiative (SBIRI) scheme through the Department of Biotechnology
in 2005–06 for supporting small- and medium-sized enterprises with grants or loans.
Companies with up to 1,000 employees will be eligible. The scheme will support pre-proof of
concept, early-stage innovative research and provide mentorship and problem-solving support in
addition to the grant/soft loan. The SBIRI scheme will operate in the phases of innovation and
product development.
SBIRI Phase I
In this stage, funding will be provided for highly innovative, early stage, pre-proof of concept
research. Preference will be given to proposals that address important national needs. The
maximum amount of funding to an enterprise will be limited to INR50 lakh, with not more than
50% of it as a grant and the remainder as an interest-free loan. For projects to be considered at
this stage, a partner from a public R&D institution would be considered important but not mandatory
for those companies that have good-quality scientists. This should encourage high-quality
scientists to agree to work in small- and medium-sized biotech companies, which is not currently
the case. The R&D requirements of the public institution will be met through a grant.
SBIRI Phase II
It is expected that some of the proposals funded with SBIRI Phase I will establish the proof
of concept. At this stage, the ability of the project to obtain venture capital funding improves.
Such projects will be eligible for Phase II funding. Some projects could be eligible for direct
Phase II support. It is proposed to provide soft loans at this stage for product development and
commercialization at an interest rate of 2%. The role of a public R&D institution at this stage,
too, is critical. The partner in the public institution at this stage will receive the R&D support as
a grant.
Small- and medium-sized knowledge-based industries in the biotech sector will be encouraged
to avail thesmelves of equity support from the SME Growth Fund of the Small Industries
Development Bank of India (SIDBI).
Code of Best Practice for Disclosure Guidelines
A Code for Best Practice for Disclosure Guidelines for the Indian Biotech Industry will be
a part of the General Listing Requirements and Disclosure Guidelines in conjunction with
SEBI’s General Listing Rules and Disclosure Guidelines.
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