India's bioeconoour is growing fast. Whether it is becoming a bioeconoour is a harder question

India's bioeconoour is growing fast. Whether it is becoming a bioeconoour is a harder question---------Bioeconoour in India - Future Policies and Prospects

In March 2026, BIRAC put India's bioeconomy at $195.3 billion for 2025. That is eighteen per cent growth in a single year and roughly 4.8 per cent of GDP. The same exercise in 2014 produced a figure of about ten billion dollars. A twenty-fold rise in eleven years is the kind of number that tends to end arguments rather than begin them.

We want to begin one anyway.

Our discomfort is not with the arithmetic. BIRAC's methodology is public; it borrows sensibly from the US National Bioeconomy Blueprint, and the underlying activity is real. Our discomfort is with what the number is being asked to prove. A bioeconomy, in the sense that most sustainability literature uses the word, is an economy that has shifted a meaningful share of its material and energy throughput from fossil carbon to renewable biological carbon, and that recycles what it uses. India's headline figure measures something adjacent to that but not identical: the economic value generated by biotechnology-enabled activity. Those two things can move in opposite directions, and nobody would notice.

What is actually inside the number

The 2025 total breaks into four segments. BioIndustrial is the largest at $90.2 billion, followed by BioPharma at $64.5 billion, BioServices at $26 billion, and BioAgri at $14.6 billion. BIRAC itself attributes most of the year’s $29.6 billion increase to four drivers: the completion of twenty per cent ethanol blending in petrol, rising consumption of GLP-1 class drugs, new global capability centres, and expansion in contract research and biologics manufacturing.

Read that list again. A fuel blending mandate and a class of weight-loss drugs account for a large share of the fastest annual growth India's bioeconomy has recorded. Both are legitimate economic activity. Neither tells us much about whether Indian chemical plants, textile mills, packaging lines or construction supply chains are drawing more of their inputs from biological feedstocks than they were five years ago.

The definitional gap is not unique to India. The European Union’s bioeconomy strategy, in place since 2012, is built around bioresources and ecological function, and sits close to its circular economy agenda. The Indian, American and Chinese framings are built around biotechnology as an industrial capability. Both are defensible. But they generate different investment priorities, and if we keep quoting a biotechnology number while making circular economy claims, we will eventually be caught out by somebody doing life cycle accounting.

We would like to see India publish two numbers side by side. Keep the biotechnology valuation, which is useful for investors and for tracking sectoral competitiveness. Add a biogenic content account: the share of industrial feedstock, materials and process energy that is renewable and biological, with residue recovery rates alongside it. We guess that India would look considerably better on the second measure in agriculture and considerably worse in chemicals and materials. That is exactly the sort of thing a policy framework should want to know.

The ethanol achievement, and its bill

India reached E20 in 2025, five years ahead of the target set in the National Biofuels Policy of 2018. Ethanol supply to oil marketing companies rose from 38 crore litres in 2013-14 to 904 crore litres in 2024-25. The government's own accounting claims over ₹1.7 lakh crore in foreign exchange savings, faster payments of about ₹1.5 lakh crore to farmers, and 86.9 million tonnes of avoided carbon dioxide between 2014-15 and February 2026. As an exercise in state coordination, it is among the more impressive things Indian energy policy has done in a decade.

The bill is coming due in a currency the programme was not designed to track.

Feedstock has quietly migrated. Grains supplied 72.4 per cent of ethanol in supply year 2025-26, with maize at 45.2 per cent and rice at 27.2 per cent, up from nothing at all in 2017-18. Sugarcane diversion was capped in 2023-24 after drought tightened sugar availability, and grain stepped into the gap. Water accounting makes the trade uncomfortable. A government study cited by the then Food Secretary put the water requirement at roughly 3,630 litres per litre of ethanol from sugarcane, about 4,670 litres from maize, and about 10,790 litres from rice. India is running its cleanest fuel programme partly on the crop that its own agro-ecological zoning has been trying to move out of the Indo-Gangetic plain for twenty years.

There is a fiscal element too. Surplus FCI rice is sold to distilleries at ₹2,320 per quintal against an economic cost near ₹4,100. Whatever one calls that gap, it is a subsidy to grain ethanol that appears nowhere in the sector's headline valuation. It is defensible when stocks stand at three times buffer norms, which they currently do. It becomes harder to defend as a standing arrangement, because a standing subsidy creates a constituency.

Which brings us to what worries the most. Installed ethanol capacity approached twenty billion litres by late 2025 against an E20 requirement of ten to eleven billion. India has built roughly twice the plant it needs. Idle capacity does not sit quietly; it lobbies. The pressure for E30 will arrive dressed as energy security, and the arguments will be sincere, and the underlying driver will be distillery balance sheets.

Meanwhile, the version of ethanol that would genuinely close a loop has struggled. The 2G plant at Panipat, commissioned in 2022 to convert paddy straw, has operated well below its 100 kilolitre per day design capacity, at times around thirty per cent. PM JI-VAN supported twelve integrated projects with about ₹1,969 crore. BPCL's Bargarh refinery in Odisha only reached commercial operation in March 2026. Cellulosic ethanol is hard: enzyme costs, feedstock logistics across a six-week harvest window, and pretreatment chemistry that behaves differently with every straw variety. The point stands regardless. The cheapest ethanol comes from crops we should be growing less of, and the ethanol we actually want comes from residue we still cannot process at competitive cost.

If we could redirect one line item in the entire bioeconomy budget, it would be this. Move viability gap funding decisively toward residue and enzyme manufacture and stop underwriting the expansion of first-generation capacity that already exceeds demand.

BioE3 has the right instinct and an unfinished test

The BioE3 Policy, approved in August 2024, is the most serious attempt India has made to treat biomanufacturing as industrial policy rather than as science funding. Six thematic sectors: bio-based chemicals and enzymes, functional foods and smart proteins, precision biotherapeutics, climate-resilient agriculture, carbon capture and utilisation, and marine and space biotechnology. The delivery mechanism is shared physical infrastructure under the Mulankur bio-enablers programme, meaning bio foundries, biomanufacturing hubs and Bio-AI hubs, funded through the ₹9,197 crore Bio-RIDE scheme.

Implementation has been unusually orderly for an Indian mission programme. The first biofoundry call went out in October 2024; the second, in May 2025, drew 213 proposals of which 24 were recommended for apex committee consideration. The Bio-AI call of April 2025 received 284 letters of intent, of which sixteen survived a four-stage evaluation, and a rolling call ran from November 2025 to June 2026. DBT notified a user access policy for these facilities in August 2025. By April 2026, eleven calls had been announced across the six themes. Compared with the usual fate of Indian mission documents, this is real movement.

Proposal volume is not capacity, though, and this is where we get nervous. BIRAC's BioNEST network has over a hundred incubators, and the honest assessment in the sector's own literature is that most sit at technology readiness levels one to three, doing proof of concept. The binding constraint sits further downstream. India's total fermentation capacity was assessed at roughly one million litres in 2022, with an aspiration to reach ten million. A single 200,000-litre facility costs somewhere between $100 million and $300 million to build. Multiply that out and the arithmetic gets sobering quickly.

The Economic Survey 2025-26 named the problem without flinching: India performs well at TRL 1-3 and poorly at TRL 7-9, and the intermediate stage of prototyping and piloting is where innovation stalls. Gross expenditure on R&D remains at 0.64 per cent of GDP, with business contributing only 41 per cent of it, against 77 per cent in China, 75 per cent in the United States and 79 per cent in South Korea. The ₹1 lakh crore Research, Development and Innovation Scheme, operationalised in November 2025 with ₹20,000 crore for FY26, is aimed squarely at this gap, and BIRAC is deploying a ₹2,000 crore tranche for TRL 4 and above through equity and debt instruments.

Diagnosis corrects. Instrument, we are less sure about. Collateral-free lending at ten to fifteen years is generous, but scale-up failure in biomanufacturing is not a financing-cost problem; it is a probability-of-total-loss problem. Debt-like structures ask a founder to carry downside on an asset that may have no resale value if the process does not hold at scale. That is what patient equity is for. If the RDI Fund's biotechnology window ends up functioning mainly as cheap credit for firms that could already borrow, it will have missed the companies it was written for.

Regulation is running at two different speeds

Two things happened to Indian agricultural biotechnology within a year of each other, and the contrast tells us something about how we handle contested science.

In July 2024, the Supreme Court delivered a split verdict on GM mustard DMH-11. Justice Nagarathna held GEAC's approval vitiated, because the biosafety dossier had not been placed in the public domain as directed in 2008 and that the precautionary principle had not been honoured. Justice Karol upheld it. The matter went to a larger bench, and the Court directed the Union government to formulate a national policy on GM crops in consultation with states, farmers and experts. Bt cotton remains the only transgenic crop approved for commercial cultivation in India, twenty-four years after its clearance.

In May 2025, ICAR released two genome-edited rice varieties, DRR Dhan 100 (Kamala) and Pusa DST Rice 1, developed with CRISPR-based SDN-1 and SDN-2 edits. These moved to release through institutional biosafety committees rather than the full GEAC process, under a 2022 MoEFCC exemption for edits that leave no foreign DNA. Controversy followed over trial data and nomination procedures under the coordinated rice project, and ICAR issued a detailed rebuttal in November 2025.

On the underlying science, I am broadly sympathetic to the exemption. An SDN-1 edit produces a change of the same character as induced mutagenesis, which India has used without ceremony since the 1960s, and more than thirty agricultural economies treat it that way. What troubles me is sequencing and disclosure. We relaxed the technically defensible category while the politically contested category sat frozen in litigation, and we announced varieties before the multi-location trial data was in public view. That converts a scientific disagreement into a trust disagreement, and trust disagreements are much harder to win, as the mustard file has been demonstrating for a decade.

This matters well beyond rice. Precision fermentation engineered microbial chassis for bio-based chemicals, smart proteins: BioE3's flagship themes depend on the same regulators and the same public. If confidence in biosafety governance erodes in agriculture, it will not stay in agriculture.

Two fixes seem obvious to me. Publish biosafety dossiers and trial data before release rather than after, as the Court told us to in 2008. And write rules that distinguish contained industrial use of engineered organisms from environmental release, because treating a closed 50,000-litre fermenter under the same logic as an open field is neither good science nor good regulation.

The part of biology that policy keeps forgetting

BioAgri is the smallest of the four segments, at $14.6 billion, roughly 7.5 per cent of the total. It has been dominated for two decades by a single trait in a single crop, and Bt cotton adoption plateaued near 94 per cent years ago. Biopesticides, microbial inoculants and biological control agents together are a rounding error in the national bioeconomy account, despite being the most literally bio-based and circular thing in the whole portfolio. A parasitoid wasp reared on a factitious host and released into a field is renewable-input manufacturing with an almost perfect circularity profile. It contributes almost nothing to our $195 billion.

We work on these systems, so I will offer a caution from our own bench rather than from a report. In our laboratory work on plant-derived phenolic compounds against lepidopteran pests, one compound that suppressed the target pest at concentrations near 980 ppm impaired the development of its larval parasitoid at roughly a quarter of that concentration. The botanical was, in effect, close to four times more hazardous to the pest’s natural enemy than to the pest itself. Nothing about its plant origin protected the beneficial insect.

That result is unremarkable to entomologists and apparently invisible to bioeconomy policy. "Bio-based" is a claim about sourcing. It is not a claim about safety or about ecological outcome. India’s registration framework for biopesticides still runs largely on data requirements designed for synthetic molecules, and non-target testing on parasitoids and predators is thin where it exists at all. If we scale bio-inputs the way BioE3 envisages scaling bio-chemicals, we will discover this the expensive way, in the third trophic level, where damage is slow and hard to attribute.

There is a quality problem sitting next to it. Spurious and under-strength biopesticide formulations have been a standing complaint from Indian farmers for years, and every such experience makes the next genuine product harder to sell. A bioeconomy that cannot guarantee colony-forming units in a bag of inoculant is not going to be trusted with engineered microbes.

Six things we would do

1. Publish a second bioeconomy account alongside the first, measuring biogenic feedstock share and residue recovery rather than biotechnology-enabled turnover. Keep the existing number for investors. Add an honest one for policy.
2. Stop underwriting first generation ethanol expansion. Capacity already exceeds E20 requirement by roughly double. Route viability gap funding to lignocellulosic conversion and domestic enzyme manufacture, and tie new distillery approvals to Central Ground Water Board block classification so that plants stop being sited in over-exploited and critical blocks.
3. Price FCI rice to distilleries at economic cost and recycle the difference into 2G infrastructure. If grain ethanol is viable, it should be viable without a hidden transfer. If it is not, we should know that.
4. Treat pilot-scale fermentation as public infrastructure with published utilisation data. The 5,000 to 50,000 litre range is where Indian bioprocesses die. DBT's user access policy is a good start; open reporting on who actually gets time on these facilities would tell us within two years whether the biofoundry network is working.
5. Settle the genetic technology question in public, as the Supreme Court asked. Publish dossiers and trial data before release. Separate contained industrial use from environmental release in the rules. Constitute the national GM policy the Court directed and take the political hit of doing it openly rather than the slower damage of doing it quietly.
6. Build a registration and quality regime for biological inputs that asks the right questions. Non-target testing on parasitoids, predators and pollinators. Enforceable batch standards for microbial products. Public procurement to give the honest manufacturers a floor. And, since none of this happens without people, a serious training pipeline for bioprocess engineering and regulatory science, because India currently produces molecular biologists in abundance and technicians who can run a fermenter at scale in scarcity.

What the target will be made of

India will probably reach $300 billion by 2030. At the growth rates of the past five years, the arithmetic is not demanding, and the $1 trillion aspiration for 2047 is at least not absurd.

The question we keep returning to is what that figure will consist of. If it is mostly biosimilar exports, contract research revenue and a fuel blending mandate running on irrigated grain, we will have built a large biotechnology industry and called it a bioeconomy, and the naming will have cost us something. If it includes bio-based chemicals displacing petrochemical intermediates, residue streams that currently burn in Punjab fields in October turning into feedstock, and biological inputs that Indian farmers trust enough to buy without subsidy, then the word will have earned its keep.

The policy architecture to get there mostly exists now, which was not true three years ago. What is missing is a willingness to measure the harder thing, and to say plainly that some of what we are currently counting does not belong in the total.

Sources

1. BIRAC, India BioEconomy Report 2026, released 19 March 2026 (segment values, growth drivers, GDP share, startup counts).
2. Department of Biotechnology, BioE3 Policy documents and Mulankur bio-enablers call status, bmi.dbt.gov.in; Rajya Sabha reply of 2 April 2026 on BioE3 implementation.
3. Cabinet approval of BioE3 Policy, 24 August 2024, Press Information Bureau.
4. Economic Survey 2025-26, chapter on research and innovation (GERD, business sector share, TRL analysis); RDI Scheme operationalised November 2025.
5. Ministry of Petroleum and Natural Gas, Ethanol Blended Petrol Programme factsheets and FAQ, PIB, June-July 2026; Rajya Sabha reply on ethanol, food security and water use.
6. ICAR-Indian Institute of Sugarcane Research and Department of Food and Public Distribution figures on ethanol water intensity; All India Distillers Association feedstock share data, ESY 2025-26.
7. Pradhan Mantri JI-VAN Yojana, 2G bioethanol project status, Ministry of Petroleum and Natural Gas.
8. Gene Campaign & Anr. v. Union of India, Supreme Court of India, split verdict of 23 July 2024 on DMH-11.
9. MoEFCC office memorandum of March 2022 exempting SDN-1 and SDN-2 genome-edited plants; ICAR releases of DRR Dhan 100 (Kamala) and Pusa DST Rice 1, May 2025; ICAR/DKMA clarifications, 2025.
10. Kumar D. and Kumar J., "Establishing BioE3 centres: catalyzing India’s biomanufacturing transformation", Frontiers in Bioengineering and Biotechnology, 2025, doi:10.3389/fbioe.2025.1681476.

Disclaimer: The views expressed in this article are solely those of the author and do not necessarily represent the views, policies, or positions of the organisation.