The Industry Between the Farm and the Laboratory: Building India's Missing Bio-Industrial Middle
1. Introduction: A Bioeconomy Without a Middle
India's interest in the bioeconomy is entering a new phase. For many years, biotechnology policy was associated primarily with pharmaceuticals, vaccines, agricultural biotechnology, and research institutions. The country's growing capabilities in biopharmaceuticals have since pushed the frontier further, while newer policy initiatives are beginning to emphasise bio-manufacturing as an industrial opportunity in its own right. At the same time, businesses are increasingly exploring a much wider range of biological applications — from industrial fermentation and specialty ingredients to bioplastics, biomaterials, nutraceuticals, and other bio-based products.
These developments are important not only because they create new industries, but because they suggest that biological resources could become a more significant part of India's manufacturing economy. Agricultural crops, forestry resources, biological residues and other forms of biomass need not remain confined to their traditional uses. They can become feedstocks for industrial processes that produce materials, ingredients, chemicals, and intermediate products for entirely different sectors.
Yet the emerging bioeconomy is often discussed as though it consists of two distinct worlds. At one end lies the biological resource base: farms, forests, fisheries, medicinal plants and biomass. At the other lies frontier biotechnology: biopharmaceuticals, advanced biologics, synthetic biology, gene and cell technologies, and other highly research-intensive fields.
Between these two worlds lies a large and potentially important industrial space.
It is the space of middle-layer bio-industries: industries that use biological materials and processes to manufacture commercially useful products, but do not necessarily require the enormous capital, frontier scientific capabilities or highly specialised workforce associated with advanced biotechnology. Industrial fermentation, botanical extraction, enzymes, specialty ingredients, nutraceutical inputs, bio-based chemicals, biomaterials, bioplastics and biological agricultural inputs are examples of this broader category.
This middle layer deserves greater strategic attention.
Its significance is not simply that it offers additional applications for biological resources. It could help India build a deeper bio-industrial ecosystem—one that connects its agricultural and biological resource base with its vast downstream manufacturing economy. It could create new markets for producers, new industrial capabilities for manufacturers and new technical career pathways for the country's expanding pool of biotechnology and bioscience graduates.
It could also have a distinctly Indian regional dimension. Many of these industries are less dependent than heavy industry on enormous land parcels, mineral resources or highly concentrated industrial infrastructure. Selected bio-industries could therefore provide opportunities for geographically constrained but biologically rich regions, including parts of the Himalayan and Northeastern states, where conventional large-scale industrialisation often encounters substantial physical and ecological constraints.
But the case for building this middle layer goes beyond regional development or employment. A diversified bio-industrial ecosystem could also strengthen India's economic resilience. It could provide alternative sources of selected industrial inputs that are currently derived from petroleum or natural gas, complement conventional agricultural inputs such as chemical fertilisers, and create multiple commercial pathways for biological resources rather than tying producers to a single product or policy-driven market.
There is, however, an important qualification. A bioeconomy is not automatically diversified merely because its inputs are biological. A particular bio-product can become fashionable, attract large investment and generate rapid capacity expansion, potentially creating a new form of dependence on a single feedstock, product or market. The experience of ethanol offers one lesson from the recent past; changing consumer preferences could create similar concentrations in the future without any government mandate.
The objective, therefore, should not be to promote one 'bio-product of the future'. Nor should it be to replace existing petrochemical, chemical or agricultural systems wholesale.
The objective should be to build a diverse middle layer of bio-industries capable of connecting many biological resources with many industrial processes, products and markets.
Such an approach would move India's bioeconomy beyond a collection of individual technological successes towards something more consequential: an integrated bio-industrial ecosystem that adds depth to manufacturing, broadens opportunities for biological-resource producers, creates technical employment, and makes both rural and industrial economies more resilient.
This article explores how such an ecosystem could be built — and why the missing middle may ultimately prove as important to India's bioeconomic transition as either the biological resources at its foundation or the frontier technologies at its cutting edge.
2. Beyond the Binary: The Missing Middle
The bioeconomy is often understood through two very different kinds of activity. The first is the production and collection of biological resources: agriculture, forestry, fisheries, medicinal plants, agricultural residues, and other forms of biomass. The second is frontier biotechnology, where scientific knowledge is converted into highly sophisticated products such as biopharmaceuticals, advanced biologics, cell and gene therapies, and other applications of synthetic or molecular biology.
Both ends of this spectrum are important. India must continue to improve the productivity, quality, and sustainability of its biological resource base, while simultaneously building capabilities at the technological frontier. But a national bioeconomy cannot become broad and resilient if industrial policy concentrates only on these two extremes.
Between them lies a substantial range of activities that transform biological resources into industrial materials, ingredients, intermediates, and products.
This is the missing middle.
Middle-layer bio-industries include industrial fermentation, botanical extraction, enzymes, specialty food and pharmaceutical ingredients, nutraceutical inputs, bio-based chemicals, biomaterials, bioplastics, biological agricultural inputs, and other forms of industrial microbiology and bio-processing. Some may eventually become sophisticated, capital-intensive industries; others may remain relatively modest in technological and capital requirements. What unites them is their position within the value chain: they transform biological resources or biological processes into commercially useful industrial inputs or products.
Their technological character is therefore different from that of frontier biotechnology. A fermentation plant does not necessarily require the same scientific infrastructure as a facility developing a new biologic. An extraction or ingredient-manufacturing enterprise does not necessarily require the capital intensity of a biopharmaceutical manufacturing facility. Yet neither is simply an extension of farming. These are manufacturing enterprises requiring process control, quality systems, engineering, skilled technicians, and commercial relationships with downstream industries.
This distinction matters for India because industrial development cannot be built entirely around either the lowest or the highest end of the technological spectrum.
A farmer producing a medicinal plant and a scientist developing a new therapeutic molecule are both part of the bioeconomy, but the economic activity between them may involve cultivation standards, aggregation, extraction, purification, formulation, testing, packaging, and the manufacture of intermediate ingredients. Each of these activities can support specialised enterprises, technical employment, and additional value creation.
The missing middle is therefore not simply a collection of 'lower-tech' alternatives to advanced biotechnology. It is a distinct industrial layer with its own capabilities, markets, and opportunities for scale.
It is also a layer in which India may possess considerable latent advantages. The country has a large agricultural and biological resource base, a substantial chemical and pharmaceutical manufacturing ecosystem, a rapidly expanding consumer economy, and a large pool of graduates in biotechnology and related sciences. Connecting these existing strengths could create industrial capabilities that neither primary production nor frontier research can generate on its own.
The objective, therefore, should not be to choose between frontier biotechnology and middle-layer manufacturing. India needs both. Frontier biotechnology can generate high-value intellectual property, advanced products, and globally competitive scientific capabilities. Middle-layer bio-industries can provide the wider industrial base through which biological resources are processed, commercialised, and connected to established manufacturing sectors.
The two can also reinforce one another. Process capabilities developed initially for relatively conventional bio-industrial applications can provide industrial experience, engineering capabilities, skilled manpower, and infrastructure that later support more advanced applications. Conversely, advances in biotechnology can gradually make previously uneconomic biological processes commercially viable.
The strategic question is thus not whether India should pursue 'high-tech' or 'middle-tech' biotechnology.
It is how India can build an ecosystem in which different technological layers reinforce one another.
2.1 The Missing Middle in India's Human Capital
The argument becomes particularly important when viewed through the lens of India's higher education system.
Over the past few decades, biotechnology and related bioscience programmes have expanded across India's universities and colleges, including a large number of private institutions. Students now graduate in biotechnology, microbiology, biochemistry, food technology, life sciences, and allied disciplines in substantial numbers.
Yet educational expansion does not automatically produce an industrial ecosystem capable of absorbing the resulting human capital.
A biotechnology graduate does not necessarily need to become a researcher working on frontier molecular biology. The industrial economy also requires people who can operate and supervise fermentation processes, conduct microbiological and chemical analysis, manage quality-control systems, develop formulations, maintain regulatory documentation, monitor production processes, and work with industrial laboratories.
These are precisely the kinds of functions that can expand as middle-layer bio-industries develop.
A broader bio-industrial ecosystem could therefore create a continuum of technical careers between the laboratory and the factory floor. It could employ graduates and diploma-holders with different levels of training, while allowing skills to accumulate through industrial experience. A small extraction enterprise, a fermentation unit, a testing laboratory, a specialty-ingredient manufacturer, and a bio-based materials company may each require different combinations of scientific, technical, engineering, and managerial skills.
This has an important implication for India's approach to human capital.
The country does not merely need to produce more biotechnology graduates. It needs to build industrial destinations for the skills it is already producing.
There is also a potentially important gender dimension. Biotechnology and bioscience programmes in many Indian institutions appear to attract substantial numbers of women students. Without making the stronger claim that women necessarily outnumber men across all such programmes, the pattern itself represents an opportunity. Expansion of industries closely related to the disciplines in which many women are already receiving higher education could help convert educational participation into technical and scientific employment.
This should not be understood as a claim that bio-industries are automatically more suitable for women than other industries. Rather, it is an opportunity to align the expansion of employment with an existing pattern of educational participation.
The employment opportunity is particularly significant because middle-layer bio-industries can be geographically distributed. Unlike some frontier biotechnology activities, which may naturally concentrate around a relatively small number of major research and industrial centres, many processing, testing, formulation, and intermediate-manufacturing activities can potentially be located across smaller cities and specialised industrial clusters.
This creates the possibility of distributed technical employment: employment that does not require every biotechnology graduate to migrate to one of India's metropolitan centres in search of a narrow set of research or corporate positions.
The resulting benefit is larger than the creation of additional jobs. It is the development of career pathways through which India's investment in bioscience education can be connected to productive industry.
In this sense, the missing middle is also a missing bridge between India's expanding biological human capital and its industrial economy.
3. Building Industrial Depth in the Bioeconomy
The case for middle-layer bio-industries ultimately rests on a broader principle of industrial development: an economy becomes stronger not merely by producing more, but by developing greater depth between its sources of raw materials and its final markets.
Industrial depth means that a country does not simply extract or grow resources and then import the technologies, materials, intermediates, and components required to transform them into higher-value products. It possesses a progressively more complete chain of capabilities within its own economy.
The principle is familiar in other industries. A strong automobile industry requires more than vehicle assembly. It requires components, materials, electronics, tooling, testing, engineering services, logistics, and specialised suppliers. A strong electronics industry requires more than final assembly. It requires components, printed circuit boards, sensors, power electronics, packaging, testing, and increasingly sophisticated design capabilities.
The same principle applies to the bioeconomy.
A region growing medicinal plants does not automatically possess a bio-industrial ecosystem. Nor does a country with world-class biopharmaceutical companies necessarily possess a broad bioeconomy. Between biological production and advanced end-products lies a chain of processes through which biological resources acquire industrial value.
The architecture can therefore be understood broadly as:
Biological resources → primary processing → bio-manufacturing → intermediate products → downstream industries → markets
The middle of this chain is particularly important because it creates multiple connections between the resource base and the wider economy.
Consider a biological feedstock that can be processed into several different products. If the industrial ecosystem possesses only one processing route, the economic value of that feedstock becomes heavily dependent on the demand for that particular product. If, however, the same resource can be processed through different technologies into different industrial outputs, producers and manufacturers gain greater flexibility.
The same applies at the other end of the chain. A bio-manufacturer supplying only one downstream industry is vulnerable to changes in that industry's demand. A manufacturer capable of supplying several sectors, each with different consumption cycles, has a broader commercial base.
This is why the middle layer should not be understood simply as a collection of individual factories. Its strategic value lies in creating connections and options.
A fermentation capability, for example, may serve several industries. An extraction facility may process different botanical resources. A testing laboratory may support numerous manufacturers. An engineering company may design and maintain equipment for several bio-industrial processes. A B2B distribution platform may connect multiple producers with multiple buyers.
Together, such capabilities create industrial depth.
3.1 From Individual Bio-Products to Industrial Platforms
This distinction also changes how India should think about industrial policy.
A conventional sectoral approach tends to begin with a product:
How can India produce more ethanol, bioplastics, enzymes, nutraceuticals, or another promising bio-product?
A deeper industrial approach begins with capabilities:
What processes, infrastructure, skills, and markets would allow Indian enterprises to produce a range of commercially viable bio-based products?
The second question is strategically more valuable because technologies and markets change.
A particular bio-product may become commercially attractive for a decade and then face competition from another technology. A process capability, by contrast, can often be adapted to changing markets.
Fermentation is a useful illustration. The same broad industrial capability can support the production of different substances depending on the organism, feedstock, process conditions, downstream processing, and market. Extraction technologies can likewise be applied to different biological materials and products. Analytical laboratories can support multiple industries rather than being tied to one product.
This makes process capability a more durable foundation for industrial policy than the promotion of individual products.
It also provides a pathway through which relatively modest industrial enterprises can evolve. A company may begin with one product and one process, develop expertise, accumulate capital, establish quality systems, and subsequently diversify into adjacent products. A cluster of such companies can collectively create a much broader ecosystem than any single enterprise could build.
The objective, therefore, should be to create conditions under which bio-industrial capabilities can diversify organically as markets evolve.
3.2 Diversification as a Principle of Bio-Industrial Development
Diversification is particularly important because biological industries face a distinctive combination of commercial and resource risks.
A biological resource can be affected by weather, disease, changing cultivation patterns, ecological constraints, and competing uses. Industrial demand can change because of consumer preferences, technological substitution, commodity prices, or government policy. A bio-product can therefore become vulnerable from both ends of its value chain.
A resilient bioeconomy should consequently seek diversification at several levels.
First, feedstock diversification. Multiple biological resources should be capable of entering industrial value chains where appropriate, rather than making an entire industry dependent on a single crop or biological resource.
Second, process diversification. Industrial capabilities should be adaptable to different products and applications.
Third, product diversification. Biological resources should have multiple potential industrial destinations rather than being locked into one product.
Fourth, market diversification. Bio-manufacturers should be able to supply multiple downstream industries and customer categories.
This principle is important enough to distinguish the proposed strategy from a conventional programme of promoting individual bio-industries.
The objective is not to eliminate specialisation. Specialisation is essential to industrial efficiency. The objective is to prevent excessive concentration — where a producer, processing cluster, or region becomes dependent upon one feedstock, one product, one customer, or one policy-created market.
The strongest bio-industrial clusters may therefore be those that combine deep specialisation in particular processes with sufficient diversity in their sources of supply and sources of demand.
3.3 The Bioeconomy as an Interconnected Industrial System
Once viewed in this way, the bioeconomy begins to look less like a separate 'green sector' and more like a cross-cutting industrial system.
Its inputs can originate in agriculture, forestry, fisheries, and other biological-resource sectors.
Its processes can draw upon biotechnology, chemical engineering, microbiology, materials science, food technology, and conventional manufacturing.
Its outputs can enter industries as diverse as pharmaceuticals, FMCG, packaging, textiles, construction, chemicals, agriculture, and food processing.
Its markets can include large manufacturers, emerging D-to-C companies, exporters, and ultimately consumers.
This interconnectedness is precisely why middle-layer bio-industries can have an influence much larger than their individual scale might suggest.
A relatively small bio-manufacturing enterprise may become a supplier to a much larger manufacturing industry. A regional testing laboratory may support dozens of enterprises. A specialised process-engineering firm may enable an entire cluster. A B2B commerce platform may connect small manufacturers with customers thousands of kilometres away.
The economic significance of the middle layer therefore lies not only in the value of the products it manufactures, but in the industrial linkages it creates.
That is the deeper meaning of industrial depth in the bioeconomy.
India's objective should be to build an ecosystem in which biological resources can move through multiple specialised industrial pathways, connect with diverse downstream markets, and generate value at successive stages of transformation.
Only then can the country's considerable biological resources, expanding scientific capabilities, growing manufacturing base, and large pool of bioscience talent can reinforce one another as parts of a coherent bio-industrial system.
4. Building Middle-Layer Bio-Industries
If the missing middle is to become a genuine industrial layer, it cannot be created simply by encouraging individual entrepreneurs to establish bio-based businesses. The industrial ecosystem requires a set of shared capabilities that allow enterprises to move from biological resources to reliable, commercially viable products.
Three forms of infrastructure are particularly important: process engineering, standards and scientific infrastructure, and diverse industrial and commercial demand. Together, they determine whether biological resources can be transformed into products that industries and consumers are willing to buy repeatedly.
4.1 Process Engineering Ecosystems
One of the less visible constraints on India's bioeconomy is the gap between laboratory discovery and commercially viable production.
A biological process that works in a laboratory does not automatically become an industrial process. Scaling it up requires equipment, process control, purification, formulation, quality assurance, utilities, waste management, and a range of engineering capabilities. The transition from a laboratory vessel to a commercial production facility can itself require substantial experimentation and technical expertise.
This is where process engineering becomes central to the middle layer.
Capabilities such as fermentation, extraction, purification, formulation, drying, separation, and downstream processing can provide the industrial foundation for numerous bio-based products. They can be combined with conventional chemical engineering, mechanical engineering, materials science, and manufacturing capabilities to create production systems that are repeatable and commercially reliable.
The strategic objective should therefore be to develop process platforms rather than merely individual products.
A fermentation facility, for example, need not be permanently tied to one product. Subject to appropriate technical and regulatory requirements, the same broad industrial capability can potentially be adapted for different organisms, feedstocks, processes, and end-products. Similarly, extraction facilities can serve multiple botanical or biological inputs, while specialised drying, purification, and formulation capabilities can support several downstream applications.
This adaptability is particularly valuable for smaller enterprises.
A company entering the bioeconomy should not always have to build every piece of industrial infrastructure from scratch. Shared facilities, contract manufacturing, common processing centres, equipment suppliers, and specialised engineering firms can lower the barriers to entry and allow enterprises to concentrate on their particular areas of expertise.
Such an ecosystem also creates opportunities for a new category of industrial enterprises: firms specialising not in the final bio-product itself, but in the machinery, process technology, engineering services, maintenance, quality systems, and technical support required to produce it.
The result is an industrial ecosystem with greater depth than a collection of standalone manufacturing units.
4.2 Standards and Scientific Infrastructure
Biological materials present another distinctive challenge.
Agricultural and biological resources naturally vary according to species, variety, geography, cultivation conditions, season, storage, and processing. Industrial customers, however, require consistency. A pharmaceutical company, FMCG manufacturer, food processor, or packaging company cannot build a reliable supply chain around an input whose composition changes unpredictably from one batch to another.
The transition from biological variability to industrial consistency therefore requires a strong quality infrastructure.
This includes:
quality benchmarking;
testing laboratories;
analytical services;
certification;
traceability;
standardisation;
equipment calibration;
regulatory support;
and continuous quality assurance.
Such infrastructure should not be regarded as an administrative afterthought. It is part of the productive capacity of the bioeconomy itself.
A bio-based ingredient becomes commercially useful only when a buyer can establish what it contains, whether it meets the required specification, whether different batches are comparable, and whether the supplier can maintain that quality over time.
India can potentially build much of this capability by making greater use of its existing scientific infrastructure.
Universities across the country already possess departments and laboratories in biotechnology, microbiology, chemistry, food science, agriculture, pharmacy, and related disciplines. Regional universities in particular could become important partners for testing, applied research, process development, and technical support for local bio-industries.
This would give universities a role beyond teaching and conventional research. They could become part of the scientific infrastructure supporting regional industrial ecosystems.
A university located in a region with significant medicinal-plant production, for example, could develop specialised expertise in botanical analysis and extraction. Another located in a fruit-producing region could specialise in food processing, fermentation, or natural ingredients. Such specialisation would allow universities to become repositories of regional scientific capability while also supporting local industries.
There would, however, need to be clear institutional safeguards.
An individual or laboratory providing commercial consultancy to a producer should not simultaneously certify that producer's products. Testing and certification must remain scientifically independent from commercial interests. Common protocols, accreditation requirements, equipment standards, personnel qualifications, laboratory audits, and appropriate conflict-of-interest rules would therefore be necessary.
The broader principle is simple:
If biological resources are to become industrial inputs, India must build the scientific infrastructure that makes their quality measurable and their performance predictable.
4.3 Diverse Industrial and Commercial Demand Ecosystems
The demand structure of the bioeconomy differs in an important respect from that of the agricultural value chains discussed in many conventional value-addition strategies.
For many middle-layer bio-industries, the principal market is not the consumer directly.
It is other businesses.
A bio-based chemical may be purchased by a manufacturer. A botanical extract may become an ingredient in a pharmaceutical or wellness product. A bio-based polymer may be incorporated into packaging. An enzyme may become an input for food processing. A biological agricultural input may be purchased by farmers through an agricultural-input company.
The middle layer therefore requires a broad and diversified B2B demand ecosystem.
4.3.1 Large Downstream Industries
Large downstream industries can provide the scale and recurring demand required for bio-industrial enterprises to grow.
Potential customers include:
FMCG companies;
FMCD companies;
pharmaceutical manufacturers;
food-processing companies;
packaging manufacturers;
textile companies;
chemical manufacturers;
construction-material companies;
agricultural-input companies.
The objective, however, should not be to make a bio-industrial cluster dependent upon one large customer or even one downstream industry.
Large industries should provide market depth, not market concentration.
A bio-manufacturer supplying packaging inputs, for example, should ideally have opportunities across several consumer-product companies and packaging applications. A producer of specialty ingredients should be able to serve multiple food, pharmaceutical, wellness, or personal-care businesses where technically appropriate.
This distinction is central to the resilience of the ecosystem.
4.3.2 D-to-C and Emerging Consumer-Product Enterprises
India's large and increasingly diverse ecosystem of Direct-to-Consumer businesses provides another potential source of demand.
A substantial subset of these enterprises operates in areas such as food, wellness, nutrition, personal care, cosmetics, and specialised consumer products — categories in which biological ingredients and materials can become commercially interesting.
These companies can perform a function that large established manufacturers may not always perform as readily: market experimentation.
A small consumer brand may be willing to experiment with a novel botanical extract, fermentation-derived ingredient, natural active, specialty fibre, or bio-based material because it is targeting a relatively specific consumer segment.
If consumers respond positively, the product can expand beyond its original niche. Other brands may adopt the same input, organised retail may begin carrying the product, and larger FMCG companies may eventually enter the category.
The pathway can therefore be:
Bio-industrial innovation → D-to-C experimentation → consumer adoption → wider industry adoption → industrial scale
This creates a potentially useful mechanism for discovering demand without requiring the government to determine in advance which bio-product will succeed.
4.3.3 B-to-B Commerce as the Connective Tissue
There is, however, a practical problem.
Bio-industrial producers may themselves be geographically dispersed, while their potential customers may be distributed across the country.
A small bio-manufacturer in a Himalayan or Northeastern industrial cluster may find it difficult to reach hundreds of potential customers in India's major manufacturing and consumption centres. Likewise, a small D2C brand may struggle to identify reliable suppliers of specialised biological inputs.
This creates an opportunity for B-to-B commerce and distribution infrastructure.
B-to-B e-commerce platforms, specialised ingredient distributors, procurement platforms, wholesalers, contract manufacturers, logistics providers, and industry networks can connect fragmented suppliers with fragmented demand.
Such intermediaries can aggregate:
products from multiple small manufacturers;
orders from multiple buyers;
technical information;
quality specifications;
logistics;
and payment and procurement processes.
This is particularly important for the distributed industrial model proposed later in this article. A small industrial park does not need every enterprise within it to possess a nationwide sales force if commercial infrastructure can connect its producers with buyers elsewhere.
The digitalisation of B-to-B commerce can therefore become an important complement to the physical decentralisation of bio-industrial production.
4.3.4 Consumer Preference as a Demand Signal
There is another potential source of demand: changing consumer preferences.
Particularly in premium segments, consumers are increasingly interested in products that contain natural, biological, or bio-based ingredients and materials. Where such claims are scientifically verifiable and independently certified, manufacturers can use them as part of product differentiation.
A potential commercial cycle can emerge:
Certified bio-based input → credible product claim → consumer interest → higher demand → larger production volumes → economies of scale → lower unit costs → wider adoption
This creates an interesting route through which a product that initially occupies a premium niche can gradually move towards mass-market consumption.
Premium consumers and emerging brands can therefore act as early adopters, while larger manufacturers can subsequently provide scale.
But this mechanism also introduces a new strategic risk — one that requires a separate consideration of concentration and sustainability.
4.4 Avoiding New Concentrations: From Bio-Based Products to Products with Certified Bio-Based Content
The success of bio-based products can itself become a source of vulnerability.
Imagine that consumers suddenly develop a strong preference for one particular bio-based material. Consumer brands begin advertising it. D-to-C companies popularise it. Larger manufacturers adopt it. Investment flows into its production. Bio-industrial clusters expand capacity, while farmers and other biological-resource producers respond to the resulting demand.
The process may appear entirely market-driven and commercially healthy.
Yet it can create a new concentration around one product.
The result could be:
Consumer enthusiasm → industrial adoption → capacity expansion → upstream feedstock expansion → cluster dependence
This would resemble the concentration problem revealed by India's recent ethanol experience, but with an important difference. The concentration would not necessarily originate in government policy. It could emerge organically from consumer preferences, commercial competition, and successful marketing.
That possibility should be anticipated rather than discovered after large amounts of capital and biological resources have already been committed.
The solution is not to suppress successful products. It is to ensure that success does not become synonymous with excessive concentration.
4.4.1 From 'Bio-Based' Products to Products with Certified Bio-Based Content
This distinction also matters at the level of the final product.
A product does not necessarily need to become entirely bio-based to contribute to the transition towards a bioeconomy. A conventional product may contain one or several bio-derived inputs, while retaining other conventional ingredients or materials.
For clarity, it may therefore be more useful to think in terms of products with certified bio-based content, rather than treating products as simply 'bio-based' or 'not bio-based'.
This allows for gradual substitution.
A manufacturer may replace one petrochemical-derived ingredient today, introduce another bio-derived input later, and progressively increase the biological content of the product as technologies, supplies, and economics permit.
Such partial substitution can:
reduce selected dependence on fossil-derived inputs;
create markets for middle-layer bio-industries;
allow manufacturers to adapt existing production systems gradually;
avoid sudden pressure on a single biological resource;
and enable several biological resources to enter industrial value chains.
The objective is therefore not to maximise the biological content of every product.
It is to identify where bio-derived inputs are technologically feasible, commercially viable, and strategically advantageous, and to expand their use without creating new forms of industrial or ecological dependence.
4.4.2 Avoiding Pressure on Biological Resources
A bioeconomy is not automatically sustainable simply because its raw materials are biological.
Biological resources remain resources. They require land, water, energy, ecological space, and time to regenerate.
If demand for a fashionable bio-based product grows faster than its resource base can sustainably respond, new problems can emerge:
excessive monoculture;
pressure on land and water;
competition with food production;
overharvesting of wild biological resources;
biodiversity loss;
feedstock price inflation;
and excessive dependence on a single crop or biological resource.
The fundamental lesson is therefore:
Replacing a fossil resource with a biological resource does not eliminate resource constraints; it changes their nature.
India should consequently favour distributed substitution rather than concentrated substitution.
That means diversifying:
biological feedstocks;
processing routes;
products;
downstream markets;
and the bio-based content
...incorporated across different products.
A successful bioeconomy should create many pathways from biological resources to industrial value, rather than allowing one fashionable product to become the destination for an entire resource ecosystem.
The objective is not maximum bio-content.
It is an economically diversified, ecologically sustainable, and industrially resilient bioeconomy.
5. Middle-Layer Bio-Industries and Rural Resilience
The case for a diversified middle layer is not confined to industrial policy. It also has important implications for the resilience of India's rural economy.
Biological-resource producers are often exposed to a particular form of concentration risk. A crop, plant, agricultural residue, or other biological resource may acquire substantial value because a particular industry begins demanding it at scale. That can be an important opportunity for producers. But if the resulting value chain becomes too dependent on one product or one buyer, the same opportunity can eventually become a source of vulnerability.
India's recent experience with ethanol provides a useful illustration. The rapid expansion of ethanol production has created an important additional market for agricultural feedstocks. Sugarcane producers, and increasingly producers of other suitable feedstocks such as rice, have discovered that their output can be converted into a commercially valuable industrial product. Refiners and processors have responded by expanding capacity.
This has demonstrated the power of industrial demand to create new value for agricultural production. It has also revealed a potential weakness of concentrated bio-industrial development: when large volumes of biological resources are directed towards one industrial pathway and processing capacity expands rapidly in response, the resulting ecosystem can eventually encounter oversupply and declining margins.
The lesson is not that ethanol was a mistake, nor that government-supported markets are inherently undesirable. The lesson is that a rural bioeconomy becomes more resilient when biological resources have multiple potential destinations rather than one dominant industrial outlet.
A similar concentration could arise around another bio-product in the future. If a particular material, ingredient, fuel, or biological input suddenly acquires a large market, producers and processors will naturally respond to the price signal. Investment will follow, capacity will expand, and biological resources will increasingly flow towards that product.
That is precisely why the development of middle-layer bio-industries should be accompanied by diversification.
A biological feedstock should, wherever technically and economically feasible, have several possible industrial pathways. The same broad resource base might support biofuels, biomaterials, bio-based chemicals, enzymes, specialty ingredients, packaging materials, fermentation products, or other industrial intermediates. Not every feedstock will be suitable for every application, but the industrial system as a whole should offer multiple routes for converting biological resources into value.
Diversification should also occur on the demand side. Producers should not have to depend upon a single processor, a single industry, or a single procurement mechanism. A broader middle layer can create a network of buyers with different requirements and different market cycles.
This is particularly important in reducing excessive dependence on government procurement. Public procurement and policy-supported demand can play a useful role in helping new industries emerge, but they are inherently vulnerable to changes in policy priorities, budgets, regulations, and political incentives. A commercially mature bioeconomy should progressively develop private markets alongside public support.
The distinction is important. Government policy can help create an industrial pathway; it should not become the only reason that pathway remains commercially viable.
A diversified middle layer can therefore connect biological-resource producers to a wider range of private-sector customers. A farmer, FPO, forest-based producer, or other supplier is no longer be simply producing for one designated market. The same regional resource base could feed several processing and manufacturing activities, each with different downstream customers.
This diversification also changes the nature of rural economic opportunity. Instead of a region becoming known primarily as the supplier of one crop to one processing industry, it can develop a broader bioeconomic ecosystem in which different biological resources support different enterprises.
Such an ecosystem can create demand for higher-quality production, encourage specialised cultivation and collection practices, and generate new opportunities for aggregation, storage, primary processing, transport, and technical services alongside farming itself.
The result is not merely higher value addition. It is a more diversified rural economy, less exposed to the fortunes of any single commodity or industrial buyer.
There is also a stabilising effect when different downstream markets move differently. Demand for one product may weaken while demand for another remains strong. A processor facing a decline in one market may be able to shift towards another product, provided the underlying process capabilities and feedstock relationships allow such flexibility. Producers, in turn, gain access to a wider industrial ecosystem rather than being locked into a single value chain.
This is the deeper rationale for middle-layer bio-industries as an instrument of rural resilience. Their value lies not only in creating another market for agricultural and biological resources, but in creating multiple markets, multiple industrial pathways, and multiple commercial relationships.
The objective should therefore be to move from a rural bioeconomy organised around individual opportunities to one organised around diversified value chains.
Middle-layer bio-industries can help make that transition by providing more destinations for biological resources and more sources of demand for rural producers. In doing so, they can reduce the vulnerability of rural economies to commodity cycles, policy swings, and the sudden expansion or contraction of any single bio-product.
In this sense, the middle layer becomes a form of economic shock absorber between biological production and industrial demand: it allows both sides of the value chain to adjust as markets evolve, rather than forcing producers and regions to rise and fall with the fortunes of one product.
6. Middle-Layer Bio-Industries and Industrial Resilience
The resilience argument extends beyond rural production. India's downstream manufacturing economy also faces a structural vulnerability: a significant range of industrial materials, chemicals, packaging inputs, and other intermediates are ultimately linked to petroleum and natural gas, much of which India imports.
This vulnerability is already visible in India. Rising global prices of crude oil and natural gas have increased the cost of petrochemical-derived raw materials, packaging materials, specialty chemicals, and other industrial inputs used by consumer-goods manufacturers. FMCG and FMCD companies are consequently facing pressure on input costs and margins.
The response of many large companies has so far been to absorb at least part of the increased costs rather than pass the entire burden on to consumers. At the same time, companies are looking to robust domestic consumption, particularly the anticipated strength of festive-season demand, to protect volumes and partly offset the pressure on margins. These are rational commercial responses to a difficult cost environment. But they also reveal a structural vulnerability: manufacturers are simultaneously relying on their own willingness to absorb higher input costs and on continued strength in domestic demand to preserve profitability.
But it is still a response to an external input shock, rather than a structural reduction in exposure to that shock.
This is where a domestic middle layer of bio-industries can acquire a second strategic significance. Its purpose would not be to replace the petrochemical economy, which will remain fundamental to India's industrial system for the foreseeable future. Rather, it would progressively expand the range of domestically produced biological alternatives to selected fossil-derived inputs wherever they are technically feasible and commercially viable.
Potential areas include bio-based packaging materials, polymers, specialty chemicals, enzymes, ingredients, additives, and other industrial intermediates. The relevant question in each case would be practical: can a bio-derived input perform the required function at a competitive cost and with sufficient consistency and scale? Where the answer is yes, a domestic bio-industrial supplier can give manufacturers another source of supply.
The downstream market is potentially broad. FMCG companies may require packaging materials, ingredients, additives, and specialty inputs. FMCD companies may use bio-derived materials in selected products or packaging applications. Pharmaceutical manufacturers may have opportunities to use biological or bio-derived inputs in particular formulations, ingredients, excipients, or manufacturing processes. Food processing, textiles, construction materials, chemicals, and packaging manufacturers can likewise become customers for different categories of bio-industrial output.
This creates an important distinction between environmental substitution and industrial diversification. The objective is not to declare that biological materials are inherently superior to petrochemical materials and then attempt wholesale replacement. It is to give Indian manufacturers a broader portfolio of inputs from which to choose.
Such diversification matters because supply resilience is partly a function of having alternatives. If a manufacturer has only one economically viable source of an essential input, an external price shock or supply disruption can quickly become a production problem. If several technically suitable sources exist, including a growing domestic bio-based option, the manufacturer has greater room to adjust.
The same principle applies to agricultural inputs. India's fertiliser system will continue to require substantial quantities of conventional chemical fertilisers. The scale of nutrient demand, the agronomic characteristics of Indian agriculture, and the need for reliable nutrient supply mean that bio-fertilisers cannot simply replace chemical fertilisers across the board. But middle-layer bio-industries can expand the domestic supply of complementary biological inputs such as microbial inoculants, biostimulants, and other biological soil and crop products.
These products can contribute to nutrient-use efficiency and soil management in appropriate applications, while creating another industrial pathway between India's biological resources, scientific capabilities, and agricultural economy. The strategic objective is therefore supplementation and diversification, rather than an unrealistic promise of complete substitution.
The same principle applies to petroleum-derived industrial materials. India will continue to require petrochemicals, and bio-based materials will not be economically or technically suitable for every application. Yet even partial substitution can matter when it occurs across a large manufacturing base. Replacing a selected input in a large number of products can create substantial aggregate demand for domestic bio-industrial suppliers without requiring the entire product to become bio-based.
This is one reason the distinction between a wholly bio-based product and a product containing certified bio-based content is strategically useful. A manufacturer does not have to redesign an entire product around biological materials. It can progressively introduce bio-derived inputs where they make commercial and technical sense.
The resulting market can become large enough to support industrial scale. Once a bio-derived input is produced consistently and in sufficient volumes, it can move beyond premium or niche applications and become a conventional industrial input. Scale can then improve economics, which in turn can broaden adoption.
There is also a potential feedback loop between downstream demand and the development of the middle layer:
Industrial demand → investment in bio-industrial capacity → greater production scale → lower unit costs → wider adoption → further industrial demand.
This is different from a policy-driven market in which one product is given a large, guaranteed outlet. The objective is to create multiple commercial markets in which bio-industrial products compete on performance, price, quality, reliability, and, where relevant, their resource and environmental advantages.
The industrial-resilience argument therefore rests on diversification rather than displacement. A stronger domestic bio-industrial layer can reduce selected import dependencies, broaden the range of available industrial inputs, and give downstream manufacturers additional options when global energy, commodity, or supply-chain conditions change.
In this sense, the bioeconomy can become part of India's wider strategy for building a more resilient manufacturing system. Its contribution need not be measured by how much petroleum or natural gas it eliminates. It can be measured by how many additional, commercially viable domestic pathways it creates for supplying the materials, ingredients, intermediates, and agricultural inputs on which the wider economy depends
7. Middle-Layer Bio-Industries and Employment Resilience
The third dimension of the middle layer is human capital. India's bioeconomy cannot become an industrial success if the country continues to expand its pool of biotechnology and bioscience graduates without simultaneously expanding the range of industries capable of employing them.
India has spent years widening access to higher education in biotechnology, microbiology, biochemistry, food technology, life sciences, and related disciplines. Public universities, private universities, colleges, and specialised institutions now offer a large and diverse range of programmes in these fields. This expansion has created a substantial pool of scientifically trained young people.
Yet the employment pathways available to this workforce remain comparatively narrow.
At one end are conventional laboratory, academic, and research careers. At the other are a limited number of advanced biotechnology and pharmaceutical companies requiring highly specialised scientific capabilities. Between these two ends lies a much larger potential employment space: the industrial activities involved in processing biological materials, operating fermentation systems, testing inputs, maintaining quality, developing formulations, managing production, and ensuring regulatory compliance.
This is precisely where middle-layer bio-industries can make a difference.
A growing bio-industrial ecosystem could create demand for laboratory technicians, microbiologists, fermentation specialists, analytical chemists, quality-control professionals, formulation specialists, process technicians, production supervisors, regulatory and compliance professionals, and process engineers. Some positions would require university degrees; others could be filled by technically trained diploma-holders or workers who acquire specialised skills through industrial training.
The significance of these occupations is that they can form genuine career pathways. A graduate might enter a testing laboratory, acquire experience in analytical methods and quality systems, move into production or process development, and eventually progress into supervisory, managerial, or specialised technical roles. A technician working in fermentation or extraction could similarly accumulate expertise as the industry develops.
The objective, therefore, should not simply be to create more 'jobs for biotechnology graduates'. It should be to create an industrial ecosystem in which scientific and technical education translates into progressively more productive employment.
7.1 Women and Bioscience Employment
There is also a potentially important gender dimension to this opportunity. Biotechnology and bioscience programmes in many Indian institutions appear to attract substantial participation by women students. The precise proportion varies by discipline and institution, and the point should not be overstated. Nevertheless, the presence of a sizeable female student population in these fields represents an existing pool of educated human capital.
Expanding industries closely related to the disciplines in which many women are already studying could help convert educational participation into technical and scientific employment.
This should not be interpreted as a claim that bio-industries are automatically more suitable for women than other forms of manufacturing. Nor should women's participation be treated as a justification for building the sector. The more useful observation is that industrial growth in an already popular field of study can improve the utilisation of human capital that India has already invested in developing.
The character of many middle-layer activities may also create opportunities for a wider range of technical roles. Quality assurance, laboratory analysis, formulation, regulatory work, documentation, process monitoring, and other functions can be as important to a bio-industrial enterprise as physical production itself. This broad occupational structure can create room for people with different educational backgrounds and career preferences within the same ecosystem.
The larger opportunity, therefore, is to move from a situation in which biotechnology is primarily an educational field to one in which it becomes a substantial employment ecosystem.
7.2 Distributed Technical Employment
The geographical distribution of middle-layer bio-industries makes this employment argument particularly significant.
India's advanced biotechnology ecosystem is likely to remain concentrated to some extent around major research universities, pharmaceutical centres, metropolitan regions, and established industrial clusters. Such concentration is not necessarily undesirable: frontier research benefits from dense networks of scientists, capital, specialised institutions, and sophisticated infrastructure.
But the entire bioeconomy does not need to be organised in this way.
Many middle-layer activities can potentially be located in smaller cities and regional industrial clusters, provided they have reliable utilities, connectivity, quality infrastructure, skilled personnel, and access to biological feedstocks and markets. A botanical-extraction unit, fermentation enterprise, testing laboratory, specialty-ingredient manufacturer, or bio-based materials company does not necessarily require the same metropolitan ecosystem as a frontier biotechnology research company.
This creates the possibility of geographically distributed technical employment. Biotechnology graduates would not necessarily have to migrate to a small number of metropolitan centres simply to find work related to their education. Smaller cities could develop specialised bio-industrial clusters in which laboratories, manufacturers, engineering firms, universities, logistics providers, and downstream companies create a local employment ecosystem.
Such distribution is particularly relevant to states and regions where conventional heavy industrialisation is constrained by geography, land availability, environmental sensitivity, or distance from major industrial corridors. The employment opportunity is therefore not simply a question of how many people the bioeconomy can employ. It is also a question of where those opportunities can be created.
This gives the middle layer an important role in India's broader human-capital strategy. It can help connect the expansion of higher education with the geographical diversification of industrial employment, allowing more regions to participate in the emerging bioeconomy without requiring every region to host frontier biotechnology.
The result would be a more distributed system of technical employment: not a substitute for India's metropolitan biotechnology centres, but a complementary network of regional industries capable of absorbing and upgrading scientific and technical talent.
In this sense, middle-layer bio-industries can contribute to employment resilience by creating multiple career pathways, across multiple skill levels and multiple locations, for a workforce whose educational base is already expanding rapidly.
8. Regional Bio-Industrialisation
The geographical characteristics of middle-layer bio-industries make them particularly relevant to a broader question of Indian industrial policy: how can manufacturing opportunities reach regions where conventional large-scale industry is difficult to establish?
India's industrial geography has naturally favoured places with large land parcels, major transport connections, established industrial ecosystems, ports, mineral resources, and large urban markets. These advantages have supported the growth of major industrial corridors and metropolitan manufacturing centres. But they also leave many regions with limited options for industrialisation.
The Himalayan and Northeastern states illustrate the challenge. Their terrain, ecological sensitivity, fragmented land availability, and distance from some major industrial markets can make large, land-intensive, or heavily polluting industries difficult to establish at scale.
This does not mean that such regions should be excluded from industrialisation. It means that their industrial strategy should be selective.
Middle-layer bio-industries offer one potentially useful category because many of them are less dependent than heavy industry on enormous contiguous land parcels, mineral resources, or very high-volume freight infrastructure. Their relationship with local biological resources can also create a natural basis for regional specialisation.
The opportunity, however, should not be interpreted as a licence to industrialise every biological resource available in a region. Ecological carrying capacity, sustainable harvesting, land and water requirements, and the needs of local communities must remain fundamental constraints.
The objective should instead be to identify bio-industries that fit the resource base, skills, infrastructure, ecological conditions, and market access of particular regions.
8.1 Regional Specialisation, Not Regional Isolation
A regional bio-industrial strategy should begin with comparative advantage.
A Himalayan region with suitable medicinal and aromatic plants may develop capabilities in botanical extraction, specialty ingredients, or related processing. A region with abundant bamboo may develop selected bio-based materials and downstream products. A fruit-producing region may develop fermentation, natural ingredients, food-processing, or other bio-based applications. Other regions may possess opportunities in enzymes, nutraceutical inputs, biological agricultural products, or specialty materials.
The objective is not for every state or district to manufacture every category of bio-product.
Specialisation is essential because industrial clusters become stronger when enterprises, skills, suppliers, universities, testing laboratories, and buyers begin to accumulate around particular capabilities.
At the same time, regional specialisation should not become single-product dependence. A region specialising in botanical industries, for example, should ideally have several products, several processing capabilities, and several downstream markets. Its industrial identity should therefore be broad enough to survive changes in demand.
This is the same diversification principle applied at a geographical level: deep specialisation in capabilities, combined with diversity in products and markets.
Such clusters can also create stronger connections between universities and industry. A regional university can develop scientific expertise relevant to the local bio-industrial base, while enterprises can provide practical problems, internships, industrial training, and employment opportunities. Over time, the relationship can become mutually reinforcing: local industry creates demand for skills, while local scientific institutions improve the sophistication of industry.
8.2 BHAVYA Micro Industrial Parks as Bio-Industrial Nodes
The proposed micro industrial parks under the BHAVYA framework could provide a practical physical platform for this model.
Parks in the range of roughly 25 to 100 acres are potentially large enough to host a meaningful cluster of small and medium enterprises, while remaining much more compatible with the spatial constraints of regions where a conventional mega-industrial estate may be impractical.
For bio-industries, however, the value of such a park would depend less on the land itself than on the shared infrastructure available within it.
A bio-industrial park could potentially provide common:
- process-engineering facilities;
- laboratories and testing infrastructure;
- energy and water infrastructure;
- waste-treatment systems;
- cold storage and controlled storage;
- packaging facilities;
- equipment maintenance services;
- logistics and distribution;
- and common spaces for training and applied research.
Such infrastructure can reduce the capital burden on individual enterprises. A small manufacturer should not necessarily have to build its own laboratory, specialised waste-treatment system, testing facility, or every item of process equipment before it can begin commercial production.
The park can therefore function as an industrial commons: a shared physical and technical environment within which specialised enterprises can operate.
This is particularly relevant to the middle layer because many of its enterprises are likely to be SMEs. Their competitiveness will depend not only on their own machinery and employees, but on whether they can access the wider ecosystem of testing, engineering, quality assurance, logistics, finance, and downstream markets.
A well-designed micro industrial park can bring several of these capabilities into physical proximity.
The park should nevertheless not become an isolated enclave. Its purpose should be to connect regional producers and enterprises to wider national value chains.
A medicinal-plant cluster in the Himalayas, for example, should not be expected to sell only within the local market. Its manufacturers should be able to supply pharmaceutical, wellness, food, cosmetics, or other downstream companies elsewhere in India and, where appropriate, export markets. B-to-B commerce, logistics, and national distribution networks can provide the connective tissue.
In this model, the micro industrial park is not the complete bioeconomy. It is a node within a much larger network.
This distinction is important because small industrial parks should not simply become collections of unrelated enterprises that happen to occupy neighbouring plots. Their greatest economic value will arise when they are designed around complementary capabilities and linked to identifiable regional resources and downstream markets
9. Stewarding India's Bioeconomy
Building a diversified middle layer requires more than individual enterprises, industrial parks, or financial incentives. It requires an institutional perspective capable of seeing the bioeconomy as a connected system.
India already has specialised institutions responsible for different parts of this system. The Department of Biotechnology (DBT), under the Ministry of Science and Technology, is the principal Union-government institutional home for biotechnology and is responsible for major initiatives such as the BioE3 Policy. Agriculture and allied departments deal with biological production; other ministries and agencies deal with pharmaceuticals, chemicals, food processing, commerce, science, higher education, environment, and industrial development. State governments, universities, research institutions, financial institutions, and private enterprises add further capabilities.
The challenge is therefore not the absence of institutions. It is the absence of sufficient coordination between them.
A bioeconomy strategy should consequently move beyond the administration of individual schemes towards value-chain stewardship: understanding how biological resources, processing capabilities, industrial enterprises, scientific infrastructure, downstream demand, skills, finance, logistics, and markets fit together.
This does not require one institution to control the entire bioeconomy. On the contrary, the complexity of the sector makes functional separation essential. The more useful approach would be to give different institutions distinct but complementary stewardship roles.
9.1 DBT as the Scientific and Technological Steward
The Department of Biotechnology should remain the principal domain steward for the scientific and technological development of India's bioeconomy.
Its natural responsibilities include biotechnology research and development, biomanufacturing technologies, scientific infrastructure, biotechnology skills, technology development and commercialisation, and the implementation of major national biotechnology initiatives such as BioE3.
This role is important because the bioeconomy cannot be built merely by identifying markets and providing industrial infrastructure. Biological processes have distinctive scientific and technological requirements. Questions of biological performance, process development, biosafety, laboratory capability, scale-up, and technology transfer require specialised expertise.
DBT should therefore maintain the scientific and technological perspective: identifying emerging technologies, supporting research and development, strengthening biomanufacturing capabilities, connecting research institutions with industry, and helping India move promising biological processes from the laboratory towards commercial production.
But scientific stewardship should not be confused with economy-wide industrial stewardship.
The bioeconomy extends far beyond biotechnology as a scientific discipline. Its products enter agriculture, pharmaceuticals, chemicals, FMCG, FMCD, packaging, textiles, construction, energy, and other industries. Decisions about industrial capacity, downstream demand, import dependence, employment, infrastructure, and regional industrialisation therefore require a broader economic perspective.
9.2 DPIIT as the Economy-Wide Industrial Steward
That broader bird's-eye view is better suited to the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce & Industry.
DPIIT need not become another biotechnology ministry. Its role would be different: to look horizontally across the economy and examine how the bioeconomy is interacting with India's wider industrial system.
This means asking questions that no single sectoral ministry can easily answer.
How is the expansion of bio-based materials affecting petrochemical demand? Which downstream industries are emerging as major users of bio-industrial inputs? Is a particular bio-product becoming excessively concentrated? Are several industries independently investing in the same processing capacity? Are biological-resource producers becoming dependent on one industrial market? Where are important downstream industries missing? Which imported industrial inputs could realistically be substituted by domestic bio-derived alternatives? Are skills, infrastructure, finance, and logistics keeping pace with industrial expansion?
DPIIT's role would therefore be one of system-wide industrial observation, coordination, and advice.
It could maintain a national picture of the bio-industrial value chain and identify emerging bottlenecks, capacity mismatches, excessive concentration, missing links, and opportunities for cross-sectoral integration. Where necessary, it could bring the relevant ministries, state governments, regulators, industry associations, universities, and enterprises together to address them.
This is particularly important because the bioeconomy will not develop as a neat, self-contained sector. A successful bio-based material may affect packaging, chemicals, agriculture, logistics, and consumer industries simultaneously. A new fermentation technology may create opportunities in pharmaceuticals, food, chemicals, and specialty ingredients. A surge in demand for one biological feedstock may affect agricultural prices, land use, water demand, and rural incomes.
The role of the economy-wide steward is therefore not to decide which product should win.
It is to ensure that the wider industrial system remains capable of responding when products, technologies, and markets change.
9.3 From Industrial Parks to Industrial Value Chains
This perspective has an important implication for the development of industrial parks.
An industrial park should not be viewed merely as a geographical collection of enterprises. Its value is greater when it functions as a node within a larger value chain.
For the bioeconomy, this means that parks in different regions can perform complementary functions. One may develop botanical extraction, another fermentation, another bio-based materials, and another specialised testing or downstream processing. None needs to contain an entire value chain within its boundaries.
The objective is to connect such nodes through suppliers, universities, testing infrastructure, logistics networks, B2B commerce, and downstream industries.
This is where the National Industrial Corridor Development Corporation (NICDC) can have an important, complementary role at the physical level. While DPIIT would maintain the economy-wide view, NICDC can provide a more grounded view of how industrial ecosystems are developing within and across the parks it stewards.
The precise scope of that role deserves a much larger discussion of its own. For present purposes, it is sufficient to envisage NICDC developing a park-level perspective on whether infrastructure, resource use, environmental performance, industrial occupancy, and common facilities are keeping pace with the growth of individual parks.
In other words:
DPIIT can look across the national industrial system; NICDC can look across the physical industrial landscape in which that system is being built.
This distinction can help ensure that industrial parks become functioning economic nodes rather than simply collections of plots and factories.
9.4 Mapping and Monitoring the National Bio-Industrial Ecosystem
An economy-wide stewardship function requires information.
DPIIT, working with DBT and relevant ministries and agencies, should therefore seek to develop a comprehensive picture of India's emerging bio-industrial ecosystem.
This could include:
- biological-resource regions and their sustainable resource potential;
- processing and manufacturing capabilities;
- biotechnology and bio-manufacturing enterprises;
- universities and scientific institutions;
- testing and certification infrastructure;
- process-engineering capabilities;
- industrial clusters and parks;
- downstream industrial demand;
- D-to-C and emerging consumer-product ecosystems;
- B2B commerce and distribution networks;
- logistics and storage;
- financing;
- employment and skills;
- domestic substitution of selected imported inputs;
- and exports.
Such mapping would make visible both strengths and weaknesses.
One region might possess abundant biological resources but little processing capacity. Another might have processors but inadequate quality infrastructure. A third might have strong universities but weak commercialisation pathways. Yet another might have growing manufacturing capacity but insufficient downstream demand.
The policy response can then become more precise.
Instead of offering the same package of incentives everywhere, governments can address the particular missing links that prevent individual regional value chains from becoming commercially viable.
Monitoring should also identify emerging overloads.
A successful bio-product may attract investment so rapidly that capacity begins to exceed realistic demand. A particular biological resource may become too heavily concentrated in one industrial application. A regional cluster may encounter infrastructure constraints. A downstream industry may begin facing supply bottlenecks.
These are not necessarily reasons to stop successful industries. They are signals that the ecosystem needs diversification, adjustment, or additional investment.
This is precisely why stewardship should be based on continuous observation rather than one-time policy design.
9.5 Converging Existing Policies
A systems perspective would also improve policy convergence.
Agriculture policy can strengthen biological-resource production. Industrial policy can support manufacturing. Science and technology policy can support research and process development. Higher education policy can strengthen skills and university capabilities. Regulators can establish standards. Commerce policy can support market access and exports. State governments can develop regional clusters and infrastructure.
Each of these interventions may be entirely rational when viewed separately.
The problem arises when their investments and incentives do not reinforce one another.
The coordinating question should therefore change.
Instead of asking:
"What is each ministry doing for the bioeconomy?"
the government should increasingly ask:
"What does this value chain require to become competitive, diversified, and resilient?"
That change in perspective can expose gaps that remain invisible when policies are examined individually. A subsidy for processing equipment is of limited value if enterprises cannot obtain standardised feedstock. A strong university programme may have limited employment impact if regional industry is absent. An industrial park may remain underutilised if testing laboratories and downstream buyers are missing. A successful bio-product may become vulnerable if its feedstock or market becomes excessively concentrated.
Value-chain stewardship is therefore about sequencing and connecting interventions, rather than simply adding more interventions.
9.6 Convening Rather Than Controlling
The institutional role should ultimately be one of convening rather than controlling.
DBT, DPIIT, state governments, universities, biological-resource producers, bio-manufacturers, large downstream industries, D2C enterprises, B2B platforms, logistics providers, financial institutions, regulators, and research organisations should be able to participate in regular platforms where emerging bottlenecks, infrastructure requirements, technological developments, market opportunities, and risks can be discussed.
The purpose of such coordination is not to tell enterprises what to produce. It is to ensure that the ecosystem contains the capabilities required for enterprises to make commercially informed decisions.
This distinction is especially important given the concentration risks discussed earlier. A government that identifies one 'promising' bio-product and then directs the entire ecosystem towards it may inadvertently create the very dependence that a diversified bioeconomy is supposed to avoid.
A better role for government is to build platforms, infrastructure, standards, information systems, skills, and connections that allow multiple enterprises and technologies to compete and evolve.
The state can create the conditions for a bioeconomy without attempting to predict its final shape.
9.7 Measuring Bio-Industrial Development
The same systems perspective should guide evaluation.
Success should not be measured simply by the number of bio-startups established, the amount of investment announced, the number of industrial parks opened, or the volume of a particular bio-product manufactured.
A more meaningful assessment would examine whether the ecosystem is becoming deeper and more diversified.
Relevant indicators could include:
- the number and diversity of middle-layer bio-industries;
- processing and manufacturing capacity;
availability of testing and certification infrastructure;
- private investment in bio-manufacturing;
diversity of feedstocks and products;
- diversity of downstream customers;
- employment generated across different skill levels;
- participation of regional universities;
- domestic substitution of selected imported inputs;
- growth of domestic and export markets;
- and the resilience of enterprises to changes in individual product markets.
These indicators would reveal whether India is building an ecosystem or simply accumulating isolated projects.
The distinction is crucial. A country may have a successful biopharmaceutical company, a large ethanol industry, several bio-startups, and a number of bio-based-material projects without possessing a genuinely diversified bio-industrial base.
Industrial depth emerges when these activities are connected by shared capabilities, suppliers, skills, standards, infrastructure, and markets.
The ultimate purpose of stewardship, therefore, is not to produce a predetermined list of successful bio-products. It is to cultivate an environment in which many bio-industrial pathways can emerge, compete, scale, adapt, and, where necessary, fail without destabilising the wider ecosystem.
10. Conclusion: From Bio-Products to Bio-Industrial Architecture
India's bioeconomy should not be judged by a handful of successful bio-products or frontier biotechnology companies. Its deeper test will be whether biological resources, scientific capabilities, manufacturing capacity, downstream industries, markets, and human capital can be connected into a broad and resilient industrial system.
That is why the missing middle matters. India needs world-class biopharmaceutical and advanced biotechnology industries, but it also needs a substantial industrial space between biological-resource production and frontier biotechnology. Middle-layer industries can transform biological materials and processes into ingredients, intermediates, materials, chemicals, and other products for the wider economy, creating industrial depth without requiring every enterprise to operate at the frontier of science or capital intensity.
10.1 Rural Resilience
For rural and biological-resource producers, the principal benefit is diversification. A biological resource should ideally have more than one potential industrial destination, so that producers do not become dependent upon one crop, processor, product, or government procurement mechanism.
India's experience with ethanol illustrates the lesson. Its expansion has created valuable demand for agricultural feedstocks, but rapid growth around one industrial pathway can also produce periods of oversupply. The answer is not to reject such markets, but to develop several industrial pathways simultaneously.
Middle-layer bio-industries can create additional destinations for biological resources, from bio-based chemicals and materials to enzymes, specialty ingredients, packaging, and other industrial applications. Multiple private markets can therefore make rural bioeconomies less vulnerable to commodity cycles and policy swings, strengthening sustainable rural economic growth and stability.
10.2 Industrial Resilience
The middle layer can also strengthen India's wider manufacturing economy. Indian FMCG and FMCD companies are currently facing higher input and packaging costs linked to petroleum and other globally priced raw materials, with large companies absorbing part of the increase and relying on continued domestic demand to protect volumes and margins.
A domestic bio-industrial ecosystem cannot replace petroleum and petrochemicals wholesale. Its contribution is to create additional domestic sources of selected materials, ingredients, chemicals, packaging inputs, and industrial intermediates wherever bio-derived alternatives are technically feasible and commercially viable. The same principle applies to agricultural inputs: bio-fertilisers and related biological products can complement, rather than replace, chemical fertilisers.
Products with certified bio-based content can make gradual substitution possible. The objective is therefore not to eliminate fossil-derived inputs, but to create more viable domestic pathways and greater industrial optionality, including reduced dependence on selected imported crude-oil and gas-derived inputs.
10.3 Employment Resilience
India has already created a large educational base in biotechnology, microbiology, biochemistry, food technology, life sciences, and related disciplines. The challenge is to connect this expanding human capital with expanding industrial opportunities.
Middle-layer bio-industries can create employment in testing, fermentation, extraction, formulation, quality assurance, process engineering, production, regulatory compliance, and technical supervision. Because many can potentially operate in regional clusters, these opportunities need not be concentrated in India's major metropolitan biotechnology centres.
The substantial participation of women in biotechnology and bioscience education also creates an opportunity to improve the conversion of educational participation into technical employment. The middle layer can therefore strengthen employment resilience through more career pathways, across more skill levels and in more locations.
10.4 The Principle of Diversification
All three forms of resilience depend upon one underlying principle: diversification. The bioeconomy itself must not become dependent upon one feedstock, bio-product, downstream industry, consumer trend, or government policy.
A successful bio-based product can create concentration even without government intervention, as consumer enthusiasm and industrial adoption rapidly expand demand for one biological input. Nor is a biological resource automatically sustainable simply because it is biological; rapid demand growth can place pressure on land, water, biodiversity, food production, or wild resources.
The answer is to build multiple feedstocks, processing capabilities, products, and markets. This is also why products with certified bio-based content can be preferable to an insistence on wholly bio-based products: gradual substitution can expand demand without concentrating excessive pressure on one biological resource. The objective is not maximum bio-content, but maximum sustainable industrial optionality.
10.5 From Individual Products to an Industrial Architecture
This principle changes the role of government. The objective should not be to predict India's next major bio-product and concentrate policy and capital around it, but to create an ecosystem in which multiple pathways can emerge, compete, scale, adapt, and, where necessary, fail without destabilising the wider system.
That requires specialised stewardship rather than centralised control. DBT can provide the scientific and technological perspective; DPIIT can provide the economy-wide industrial perspective, examining interactions with agriculture, chemicals, pharmaceuticals, FMCG, FMCD, energy, packaging, employment, trade, and regional industrialisation; and NICDC can complement these with a grounded perspective on the physical industrial ecosystems through which value chains are built.
Universities, industrial parks, process-engineering firms, B2B commerce, downstream industries, and D2C enterprises can each contribute specialised capabilities. Together, they form an architecture rather than a collection of schemes.
At its foundation are biological resources; above them are middle-layer industries; around them are process engineering, standards, scientific institutions, finance, logistics, and industrial parks; beyond them are diverse downstream industries and markets; and across the system is stewardship that identifies gaps and emerging concentrations without dictating the final structure of the economy.
India therefore does not need to choose between the biological economy at the bottom and frontier biotechnology at the top.
It needs to build the industrial middle that connects them.
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