Higher R&D allocation in Budget to boost discovery of new molecules

R&D for innovative sectors

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26 Aug, 2025 12:21

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Indian pharma, CDMO and niche chemical companies have of late been spending heavily on R&D to discover new molecules and processes. This has turning out to be a prudent move as Indian companies are moving up the value chain. They are not only looking at opportunities arriving from the shift in supply chain from China to India a.k.a. China plus one theme but eyeing collaboration with global innovators.

Budget 2024 announcement of a corpus of rupees one lakh crore with fifty-year interest free loan is clearly supportive in that direction.  As per the government, the corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains.

Of late Indian chemical companies have forayed into niche fields of battery chemicals (HEG, Himadri Specialty), taken significant strides in biologics R&D (Syngene, Biocon), immunosuppressants (Concord biotech). Companies have tied up with innovators in the field of oncology (Ami Organics contract with Fermion) and India pharma majors have stepped up R&D for the new age molecules. Sun Pharma and Cadila have in the recent past reached new milestones in their innovative portfolio of ophthalmology, derma and nephrology. Among recent noticeable moves were for Orchid Pharma wherein its antibiotic -  Exblifeb – received European Medicines Agency approval.

We believe recent focus on R&D should be positive for the research focused companies particularly from the domains of biotech, oncology, battery chemicals and green energy.

Follow author on twitter @anubhavsays. For more research articles, visit our Moneycontrol Research page.