India’s biotech, life sciences push and broader startup ecosystem are heading into 2026 with a common theme—scale with discipline—as policymakers seek to translate laboratory innovation into manufacturing heft while investors press founders to prioritise fundamentals after a funding slowdown, executives and industry watchers said.
Government-backed Biotechnology Industry Research Assistance Council, or BIRAC, said India’s biotech ecosystem expanded sharply in 2025, with the bioeconomy now valued at about $165 billion and more than 10,000 startups working across healthcare, agriculture, clean energy and industrial biotech.
“2025 has been a landmark year for India’s biotech ecosystem,” said Dr Jitendra Kumar, managing director, BIRAC, adding that the agency’s efforts have focused on strengthening the innovation pipeline by expanding bio-incubation capacity, building plug-and-play lab infrastructure and co-funding high-risk research so ideas can move faster “from lab benches to real-world impact”.
Biotech scale-up in 2026
Kumar said the government’s BioE3 Policy was designed to accelerate that transition by structuring innovation around six strategic themes and by backing new capacity such as biomanufacturing hubs and biofoundries.
“DBT and BIRAC are creating a strong pathway from research to large-scale manufacturing,” he said, positioning India to compete as a global biomanufacturing base as demand grows for vaccines, diagnostics, med-tech and newer platforms such as synthetic biology.
The next year will test whether capital, regulation and execution can keep pace with ambition. Kumar said India’s biotechnology market could grow more than 13%-17% annually, driven by biopharma, vaccines, med-tech and agri-biotech alongside emerging areas such as biomanufacturing and synthetic biology.
With catalytic public funding, higher participation from venture investors and continued regulatory streamlining, India could move towards a $300 billion bioeconomy by 2030, he said.
Yet the broader investment environment for startups remains selective, with investors increasingly rewarding predictable unit economics and clear paths to profitability.
Jeet Chandan, managing director at startup advisory BizDateUp, said 2025 had been “a year of pause and perspective” as funding slowed, even as some segments continued to attract cheques.
Chandan cited a pullback in the third quarter, when funding fell 38% year on year to just over $2.1 billion across 240 deals, a correction he said helped bring valuations closer to operating realities.
The slowdown, he added, pushed founders to refocus on execution. “It brought a welcome focus back to building with intent, prioritising strong fundamentals, realistic valuations and long-term sustainability,” he said.
Investor interest has not disappeared, he said, pointing to continuing appetite for ecommerce, AI and specialised technology, with sentiment “cautiously optimistic” on deal activity in the coming quarters. What has changed is the bar for backing growth, particularly as capital becomes more expensive and diligence more stringent.
Chandan said a notable shift has been the rise of founders in tier-2 and tier-3 cities building capital-efficient businesses in agritech, regional direct-to-consumer brands, SaaS tailored to Bharat markets, logistics and healthcare delivery.
Those entrepreneurs are leaning on local insights to build scalable models, he said, drawing attention from domestic investors and micro-VC funds.
For 2026, he expects a more mature market in which funding follows traction rather than narrative.
“We expect sustained investor focus on AI-led innovation, deep-tech, climate-tech and consumer businesses with clear unit economics,” Chandan said, adding that early-stage startups that combine fundamentals with demonstrable demand are likely to lead the next wave.
