The Indian pharmaceutical industry accounts for over 8 per cent of global pharmaceutical production. The industry has over 60,000 generic brands across 60 therapeutic categories and manufactures more than 400 different active pharmaceutical ingredients (APIs). India is a major destination for manufacturing of generic drug. India has over 120 United States Food and Drug Administration (USFDA) approved manufacturing facilities.
The Indian pharma market is forecasted to double in five years reaching US$ 36 billion by 2016. With an expected market size of US$ 26.1 billion in 2016, there is immense potential for growth in India's generic market. The contract research and manufacturing services (CRAMS) segment is expected to have a market size of over US$ 7 billion by 2012. Due to its cost advantage, India is increasingly becoming a hub for clinical trials with an estimated market value worth US$ 400 million in 2009.
The Government of India (GOI) unveiled 'Pharma Vision 2020' aimed at making India a global leader in end-to-end drug manufacture and also reduced approval time for new facilities to boost investments in the sector. The Government allows zero duty for technology upgrades in the pharmaceutical sector through the Export Promotion Capital Goods (EPCG) Scheme and also facilitates 100 per cent foreign direct investment (FDI) through automatic route. GOI further plans to set up a US$ 640 million venture capital (VC) fund to boost drug discovery and strengthen the pharma infrastructure.
The introduction of product patents in India in 2005 has boosted the discovery of new drugs. Low cost of production and research and development (R&D) has increased the efficiency of Indian pharma companies and comparative cost advantage has enhanced the pharma exports.