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August, 2011

The pharmaceutical industry in India is valued at US$ 12 billion with an annual compound annual growth rate (CAGR) of 10-11 per cent. The industry spends around 18 per cent of its revenue on research and development (R&D). In India, the clinical research industry is estimated to be a US$ 2.2 billion with a healthy CAGR of 23 per cent. India is ranked as the third largest emerging market and is growing fastest in conducting number of trials.

Moreover, India is expected to join the league of top 10 global pharmaceuticals markets in terms of sales by 2020 with the total value reaching US$ 50 billion, according to a report by PricewaterhouseCoopers (PwC).

Sector Structure/ Market Size

The Indian pharmaceutical market is poised to grow to US$ 55 billion by 2020 from the 2009 levels of US$ 12.6 billion, as per a McKinsey & Company report titled “ India Pharma 2020: Propelling access and acceptance realising true potential”. The industry further holds potential to reach US$ 70 billion, at a CAGR of 17 per cent.

The pharma industry constitutes around 8 per cent of the world’s pharmaceutical production. Over the last couple of years, Indian pharma companies have been increasingly targeted by multinationals for both collaborative agreements and acquisition, as per an Espicom report titled, “The Pharmaceutical Market: India Opportunities and Challenges”. The report further echoes the sentiments and the trends of the industry in totality.


India’s exports of drugs, pharmaceutical & fine chemicals stood at US$ 9.26 billion during April 2010–Feb 2011, up 16.15 per cent as compared to US$ 7.97 billion in the same period during the previous year. India’s exports has recorded a growth rate of over 20.07 per cent, during the period of the two financial years in the study and the exports to rest of the world has grown by 9 per cent, according to DGCIS data from Pharmexcil Research.


The drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth US$ 4.84 billion between April 2000 and May 2011, according to data published by Department of Industrial Policy and Promotion (DIPP) upto May 2011.

Indian pharmaceutical market is predicted to grow to US$ 55 billion by 2020 from US$ 12.6 billion in 2009, as per a McKinsey report.

The Indian pharma industry is estimated to grow manifolds, on back of a high middle-class population base, improvements in medical infrastructure and the establishment of intellectual property rights.

The Indian pharmaceutical sector has registered an outstanding growth during the last few years and has become the hub of pharmaceutical companies owing to low cost manufacturing, large population, and high demand, as per a research report - Global Contract Manufacturing Market Analysis.


India tops the world in exporting generic medicines worth US$ 11 billion and currently, the Indian pharmaceutical industry is one of the world's largest and most developed, according to Mr Srikant Kumar Jena, Union Minister of State for Chemicals and Fertilisers.

The Indian generic drug market is expected to grow at a CAGR of around 17 per cent between 2010-11 and 2012-13.

Generics will continue to dominate the market while patent-protected products are likely to constitute 10 per cent of the pie till 2015, according to McKinsey report ‘India Pharma 2015 - Unlocking the potential of Indian Pharmaceuticals market’. Moreover, as per a press release by research firm RNCOS, the report titled ‘Booming Generics Drug Market in India' projects the Indian generic drug market to grow at a CAGR of around 17 per cent between 2010-11 and 2012-13.