India to launch gap funding scheme for early-stage drug discovery startups

India's pharmaceutical sector is set to receive a boost with the introduction of a new gap funding initiative targeting early-stage drug discovery ventures. The Department of Pharmaceuticals will launch a dedicated track under the Promotion of Research and Innovation for Pharmaceutical (PRIP) scheme, designed specifically for startups and micro, small, and medium enterprises (MSMEs) engaged in foundational research.

The initiative addresses a critical funding gap that has historically hindered homegrown pharmaceutical innovation at the pre-clinical and early clinical research phases. Under the new framework, eligible startups and MSMEs can access grants of up to ₹50 crore per project to accelerate their novel drug development programmes.

The funding mechanism will focus on companies at the initial research stage, where traditional venture capital and private investors typically show limited interest due to perceived risks and extended timelines before commercialisation. By providing targeted financial support during these formative phases, the scheme aims to nurture indigenous pharmaceutical innovation and reduce India's dependence on imported drug formulations.

Industry observers expect the initiative to catalyse research into treatments for neglected diseases and novel therapeutic approaches, potentially strengthening India's position in the global pharmaceutical research landscape. The move aligns with the government's broader push to establish India as a hub for drug discovery and innovation in Asia.