Startups: India's next big bet on pharma innovation?

While India's pharma startups can resolve scientific and systemic blind spots, funding remains the missing link blocking scalable impact

- Neha Aathavale

While established pharma companies focus on strategy and scale, pharma-focused startups in India are quietly laying their groundwork. Not yet driven by scale, but certainly by possibility. These early-stage ventures are doing the work that bigger players sometimes overlook: filling out the missing parts of India's pharma jigsaw.

Rather than positioning themselves as challengers to big pharma companies, pharma startups are emerging as its R&D scouts; de-risking early innovation, translating academic research into viable therapies, and plugging capability gaps in areas like drug delivery, repurposing, and AI-led discovery. With risk-tolerant capital cautiously entering the fold, public schemes nudging R&D beyond academia, and large pharma firms showing interest in early-stage partnerships, the foundations are being laid. Can India now build the kind of patient, high-stakes startup ecosystem pharma innovation needs; before this quiet ambition loses steam?

Numbers say it all

The Indian pharma startup ecosystem is grappling with a pronounced funding downturn. As of May 31, 2025, total funding stands at $25.3 million—down 75 per cent and 52 per cent compared to $101 million and $53.1 million raised during the same period in 2024 and 2023, respectively.

Singh attributes this decline to a mix of global and local challenges, “The slowdown is likely driven by a mix of global pricing pressures, regulatory shifts, and changing export dynamics, including stricter scrutiny of pharmaceutical exports from India and adjustments in domestic drug pricing policies.” She adds that policy developments in key export markets, aimed at reducing drug costs, have “further intensified the challenges” for Indian pharma players; making investors more cautious.