India's life sciences evolves from vaccines to innovation

The Indian government's Union Budget 2026-27 announced the Biopharma Shakti initiative with an INR 10,000 crore (USD 1.1 billion) outlay to strengthen the ecosystem for biologics and biosimilars. In real estate terms, this translates into substantial demand across specialised facility types. India's established strengths in API manufacturing, formulation processes, CRAMS (Contract Research and Manufacturing Services), and biosimilars are underpinned by robust talent availability and existing infrastructure. These now require dedicated real estate for R&D laboratories, manufacturing facilities, cold chain logistics, and integrated bio-clusters.

Over the past three years, Hyderabad and Bangalore have emerged as the dominant markets for life sciences real estate among India's top seven cities. From a gross leasing perspective, Hyderabad has commanded approximately 35% of India's total life sciences activity, establishing itself as the country's undisputed leader. Bangalore follows as a strong second, accounting for approximately 25% of national absorption during the same period. This geographic concentration reflects the cities' established pharmaceutical ecosystems, research infrastructure, and talent density.

The government's Biopharma Shakti initiative specifically targets the expansion of clinical trial sites and manufacturing incentives for fermentation-based bulk drugs, biosimilars, and biopharma packaging. This policy signals increased demand for specialised real estate in the coming years. The underlying market fundamentals support this trajectory. The increasing prevalence of chronic diseases requiring biosimilar treatments, combined with India's positioning as a cost-effective manufacturing centre for these drugs, creates a compelling case for sustained real estate growth.

 The most notable trend in India's life sciences real estate story is the emergence of Global Capability Centres (GCCs). Between 2023 and 2025, GCCs accounted for approximately 30% of total life sciences leasing. This substantial share underscores how multinational pharmaceutical and biotech firms are not only manufacturing in India but also establishing critical research, analytics, and back-office operations. Each function has distinct real estate requirements, ranging from laboratory-grade R&D facilities to conventional office infrastructure.

Geographically, Hyderabad has dominated GCC absorption within the life sciences sector, capturing approximately 45% of total activity during 2023-2025. Bangalore and Chennai followed with shares of approximately 26% and 13% respectively. Each city brings distinct advantages. Hyderabad leverages Genome Valley's ready infrastructure, Bangalore offers access to talent and suitable infrastructure for GCCs, and Chennai's industrial sector dominance provides seamless integration between manufacturing and corporate functions.

The convergence of policy ambition and market momentum reveals a critical challenge. A serious gap exists between required real estate and available specialised infrastructure to support this potential demand. Notably, the top three cities with the highest average GCC share within life sciences had their own advantages. This pattern underscores the importance of integrated ecosystems where research, manufacturing, and corporate operations can coexist efficiently.

In other geographies, the lack of purpose-built infrastructure forces occupiers to retrofit existing structures to meet the specific requirements of laboratory spaces. This sometimes extends to modifications for waste disposal systems and specialised utility infrastructure. This reactive approach, while addressing immediate needs, highlights the opportunity for developers to deliver purpose-built, GMP-compliant facilities that can accommodate the sophisticated requirements of India's evolving life sciences sector. As the Biopharma Shakti initiative gains momentum, the real estate industry's ability to deliver specialised, ready-to-occupy infrastructure will determine which markets capture the next wave of growth.