Expanding Russian Biotech Ventures in India: Regulatory and Compliance Guide

The biotechnology sector in India is one of the most growing sectors in the world and gives opportunity to international investors. For Russian biotech companies, India offers an attractive opportunity with its buoyant pharmaceutical industry, inexpensive manufacturing base, and supportive government policies on foreign investments. However, entering this market is not a straightforward experience, as thorough understanding and prior knowledge of India’s regulatory and compliance landscape is fundamental.

In this blog, we offer a step-by-step guide for Russian biotech companies that seek to set foot into India covering the regulatory framework in India, manufacturing licenses, environmental regulations and protection of intellectual property, along with the importance of having an expert guidance.

Reason Behind the Importance of Indian Market for Russian Biotech Companies

Opportunity in the Market

The last few years have caused India’s biotechnology industry to burgeon tremendously. The biotechnology industry is expected to reach a valuation of 300 billion US dollars by the end of 2030. In India, a huge population coupled with increasing aging, healthcare needs, and rising chronic diseases ensures robust market potential for groundbreaking biotech products.

Economic Cooperation

Relations between India and Russia have always been robust, particularly in the science & technology sector. Russia’s talent in biopharma, genomics, and vaccine research pairs well with India’s capabilities in affordable manufacturing, distribution, and human resources. This cooperation can be used to design new collaborative structures (such as technology transfers and joint ventures).

Special Programs

The Government of India has implemented several initiatives and policies to attract foreign investment with the primary objective to create a strong business ecosystem making India an attractive business destination. Flagship initiatives like ‘Make in India’ and ‘Startup India’ is aimed at increasing foreign investment into India, especially in key areas such as biotechnology. The Government makes it attractive for new entrants and competitors by offering tax exemptions, grants, and minimal regulatory burden. Additionally, the Government aims to establish India as a center for drug discovery and development processes and solidify its position as a global leader by the year 2047 in the pharmaceutical sector.

Regulatory Framework in India

In India, the regulatory framework is robust, ensuring that biotechnological products are both safe and effective at all international standards.

In India, the primary regulatory bodies are the Central Drugs Standard Control Organization (CDSCO) and the Department of Biotechnology (DBT). CDSCO is the Central Drug Authority for discharging functions assigned to the Central Government under the Drugs and Cosmetics Act, 1940 and its rules. CDSCO supervises the regulation of drugs and pharmaceuticals, ensuring that biotechnological products meet safety and efficacy standards.

On the other hand, DBT operates under India’s Ministry of Science and Technology and is responsible for promoting and regulating the biotechnology sector, including issuing guidelines for research and development. It further ensures that biotechnology research adheres to ethical and safety standards and works closely with other regulatory bodies to ensure compliance with national and international standards.

Manufacturing and Licensing

Establishing a biotechnology plant in India involves obtaining various licenses and permits. The process begins with selecting an appropriate business structure, particularly for foreign companies. After selecting the appropriate business structure, the biotechnology manufacturing plant must obtain a building plan approval and registration under the relevant provisions of the Factories Act, 1948, to establish the biotechnology plant. Other key approvals/ licenses specific to the biotechnology plant include the Drug Manufacturing License, issued by the CDSCO, and the Biosafety Approval/ clearance from the Department of Biotechnology.

Good Manufacturing Practices (GMP) are crucial for ensuring that biotechnology products are consistently produced and controlled according to quality standards. The World Health Organization (WHO) has also issued GMP specific for the biotechnology products to which the biotechnology manufacturing plants must comply in order to maintain the high-quality production.

Further, all pharmaceutical manufacturing units in India must comply with Good Manufacturing Practices and Requirements of Premises, Plant and Equipment for Pharmaceutical Products as per the requirements outlined under the Drugs Rules, 1945 under the Drugs and Cosmetics Act, 1940. These GMP practices minimize the risks associated with pharmaceutical manufacturing and ensure the quality, safety and efficacy of the products. Few of the main principles govern quality risk management, sanitation and hygiene, change control and waste management.

In order to manufacture, sell and distribute biotech products in India, there are certain licenses that are required to be obtained as may be applicable. This includes, without limitation, license to manufacture for sale or for distribution, license to repack for sale or distribution and loan license to manufacture for sale of such products.

Other necessary licenses and permits include obtaining environmental clearances, a No Objection Certificate (NoC), an Import Export Code, and various permissions from local state and municipal departments in the area where the biotechnology manufacturing plant is located.

The approval process for obtaining every approval varies and will typically involves multiple steps, including the submission of detailed project reports, environmental impact assessments, and safety evaluations. Seeking legal assistance ensures that the regulations are adhered to and helps avoid costly delays.

Environmental Regulations and Protection for Intellectual Property

Compliance with environmental regulations is critical for minimizing the impact of biotechnology manufacturing on the environment. Biotechnology manufacturing plants must implement effective waste management systems to handle biological and chemical waste in accordance with the Bio Medical Waste Management Rules, 2016, Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 and other applicable waste management legislations. This includes proper segregation, treatment, and disposal of waste to prevent environmental contamination.

Additionally, given that the biotechnology industry is where innovation and proprietary technology provide competitive advantages, protecting intellectual property (IP) is quite crucial. All necessary steps must be taken to safeguard the underlying IP, including patents, trademarks and trade secrets, to ensure that the company retains exclusive rights over its innovations.

In order to navigate the complex landscape of IP laws and environmental regulations, engaging an experienced legal firm is essential as they assist in the application filing process, managing license agreements, enforcing IP rights in case of infringement, thereby protecting the company’s interests to ensure long-term market competitiveness. 

Challenges and Solutions of Compliance

Setting up and operating a biotechnology manufacturing plant in India involves several challenges such as evaluating complex regulatory framework, which involves multiple approvals from regulatory bodies like CDSCO and DBT. This may turn out to be challenging due to difference in legal and procedural standards as compared to the Russian laws that the companies may be familiar with. Further, as an additional layer of complexity, ensuring consistent quality standards, managing costs, and integrating advanced technologies can be resource intensive.

Additionally, differences in business culture, communication styles and language barriers may create misunderstandings and delays in negotiations, agreement executions and daily operations. Furthermore, trade restrictions, recruiting skilled professionals with expertise in biotechnology and facilitating knowledge transfer from Russia to India may require additional attention and training. The competitive dynamics of the biotechnology industry necessitate continuous innovation and market awareness.

Solutions

To overcome the challenges effectively, biotechnology manufacturing companies in India must stay updated of all the legal requirements to ensure compliance with the applicable laws and navigate the complex regulatory hurdles. Further, regular market analysis, investment in comprehensive research and hiring local legal experts, such as Ahlawat & Associates are essential to stay competitive in this high demand sector.

Entering into joint ventures with experienced law firms such as Ahlawat & Associates works as a strategic advantage. Ahlawat & Associate is a full-service law firm with vast experience in assisting entrepreneurs in setting up and operating successful manufacturing facilities in India.

How Ahlawat & Associates Supports Biotech Ventures

One of the prominent law firms with strong knowledge of India’s business regulation and compliance is Ahlawat & Associates. Our services include the following:

• Business Setup, Structuring and Regulatory Compliance: Helping companies set up operations, and obtain the necessary approvals, clinical trial permits, and manufacturing licensure.
• Intellectual Property Management: All-inclusive services for patent applications, trademark registrations, as well as resolving IP litigation matters.
• Contractual Guidance: Protecting the interests of the clients by drafting and reviewing agreements with local partners.
• Litigation Support: Legal representation and advocacy for the clients in regulatory or IP-related litigations.

Conclusion

With the aid of experienced consultants, compliance hurdles can be addressed, allowing Russian biotech companies to unlock the potential of India’s biotech industry. Expert guidance in areas such as regulatory compliance, IP protection, and market strategies can help redefine these challenges and ensure sustained success.

Frequently Asked Questions

Q.1:- What are the essential processes a firm must undergo to gain an approval for a biotech drug in India?

A:- Establishing a biotechnology plant in India requires establishing a manufacturing facility in India by obtaining various licenses and permits. Firms also have to follow the preclinical and clinical phases of the drug approval process established by CDSCO. Post successful trials, CDSCO then manages and handles applications for new drug approvals.

Q.3:- Is there a government policy tailored towards foreign biotech investments into India?

A:- The Government of India has launched several initiatives to support the growth of the manufacturing sector, providing a favourable environment for innovation and investment. In addition to these initiatives, the government offers various incentives and concessions to biotechnology companies which includes tax benefits and grants for research and development. Moreover, state-specific incentives vary with each state offering benefits to attract investments.

Q.4:- What is the contribution of Ahlawat & Associates towards the entry of biotech firms in the market?

A:- They offer comprehensive legal services, covering the entire spectrum from assisting businesses in setting up a manufacturing facility in the preferred location, obtaining relevant regulatory clearances, and conducting compliant business operations.

Q.5:- How long will it take a foreign firm to establish a biotech manufacturing facility in India?

A:- It usually takes around 1-2 years depending on the requirements for regulatory approvals and the operations needed to be set up.