Biocon cofounder Kiran Mazumdar-Shaw said she doesn't think the US tariffs are an issue for India. In an interaction with Dipak Mondal and Pushpita Dey, Shaw tells the US needs to bring down its healthcare costs, and India is very well positioned to be a partner. Edited excerpts:
Several agencies have revised their projections for India’s GDP growth upwards, reflecting strong macroeconomic fundamentals. How do you reconcile the optimism seen in the growth numbers with economic realities?
I think, India should become very competitive. We have to make sure that we deliver on the potential. So, I think ease of doing business is a very important part of delivering on the opportunity and the potential. I believe that technology is going to play a very important role in this.
It’s really about investing in some critical areas where we can actually generate the kind of growth that we need. In our sector (pharma), for instance, I believe that we need to focus on personalised medicine because India should be the go-to country for it, as we can do that very cost-effectively. If we really use AI in personalising medicine, in genomic profiling, personalised cell and gene therapies, and bespoke on-demand therapies, we can become an interesting opportunity, especially when we have the potential to generate huge amounts of data when we create such opportunities.
Why do you think foreign investors are pulling out money from India?
Yes, I think that's a problem… there are some comments that we may be overvalued, but in the markets, I'm not sure. Certain segments might be, but certainly not pharmaceuticals.
Do you think that restructuring of long-term capital gains tax can help in a way?
Investors don't like the sound of capital gains tax, especially when they are investing for a very short term. And they don't want to reinvest. If you don't encourage reinvestment, and keep taxing capital gains, it's not good for investment. But there should be a caveat. We don't want money to leave the country. But if investors reinvest their gains, I don’t think you should charge them capital gains.
The US is an important market for Indian pharma exporters, but challenges like tariffs, the threat of Section 301 persist. How do you think the pharma industry will navigate them?
I don't think tariffs are an issue. At the moment, there are no tariffs. As I have mentioned, the opportunity for India is to position itself as a strategic partner to the US. The US needs India as much as India needs the US, and the US market is extremely important for India. The US also needs to bring down its healthcare costs, and India is very well-positioned to be a partner in helping it achieve that. Therefore, I don't think we should keep talking about tariffs. I believe the nature of the commentary needs to change. People learn how to navigate these challenges. We cannot constantly look at tariffs as a threat. We have to learn how to navigate the situation, just as everyone else does.
The future of drug discovery will be driven by data and AI. While India has the capacity to generate data at scale, are we investing enough in AI to collect, analyse and translate this data into innovation, or are we falling behind the curve?
AI investment is extremely expensive. Globally, there is an ongoing debate over whether countries are over-investing in data centres and under-investing in the actual deployment of AI. I believe India is only at the beginning of its AI journey and has not yet made this mistake. Several countries have invested heavily in infrastructure but have not focused enough on deployment, whereas India is placing considerable emphasis on the latter. We need to get this balance right. Therefore, it is too early to say whether India is ahead of or behind the curve in AI investment. If you look at the pharmaceutical and medical sectors, much of the investment in AI today is being driven by large pharmaceutical companies in the US. Whether these investments will ultimately deliver the desired results remains to be seen. We should not simply follow that trend.
There is no doubt that AI investment is expensive. However, India has a competitive talent pool, which gives us an advantage. Companies must clearly understand where they are investing, how they are deploying capital and what outcomes they ultimately want to achieve. That is what Indian companies need to figure out.
