Introduction
India plays an important role in the global pharmaceuticals and vaccine industry. It is the largest provider of generic medicines globally. The country has a share of 20% in the global supply volume and contributes to around 60% of the global vaccines. India ranks third in the world in terms of volume and is the fourteenth largest in terms of value. Key segments of the Indian pharmaceutical industry are OTC medicines, Generics, APIs, Vaccines, Biosimilars, and Custom Research Manufacturing (CRM).
India is the world leader in supplying vaccines like DPT, BCG, and Measles. It also has the highest number of US FDA-approved plants outside of the USA. The key USP of the Indian Pharmaceutical Industry is affordable price and high quality and because of this, India is also sometimes called the “Pharmacy of the World”. The total annual turnover of the industry was US$ 49.78 billion in FY23 and US$ 41.68 billion in 2021-22. One of the major achievements of the Indian Pharma Industry is access to affordable HIV drugs. Additionally, India is one of the largest suppliers of low-cost vaccines to the world.
India majorly exports drug formulations & biologicals, and these products contribute to about 75% of the total pharmaceutical exports out of India.
Export Trend
India’s share of pharmaceuticals and drugs in the global market is 5.71%. Formulations and Biologics constituted the major portion of India’s exports with a share of 72.54% followed by drug intermediates and bulk drugs. In FY25 (until June 2024), the exports of drugs and pharmaceuticals stood at US$ 7.20 billion. During FY24 the exports of drugs and pharmaceuticals stood at US$ 27.82 billion. In FY23, the exports of drugs and pharmaceuticals stood at US$ 25.4 billion. During 2021-22, the country exported pharma products worth US$ 24.59 billion, while in 2020-21, the exports grew at 18% YoY to US$ 24.44 billion. This robust performance was achieved despite the global supply chain disruptions, lockdowns, and subdued manufacturing. The USA, Belgium, South Africa, the UK, and Brazil were India’s top five export destinations in FY23. India played a key role during the COVID-19 pandemic and demonstrated its ability to be a consistent and reliable pharma supplier to the world even during times of crisis.
India has the highest number of United States Food and Drug Administration (USFDA) compliant companies with plants outside of the USA. About 8 out of 20 global generic companies are from India and over 55% of the exports from the country are to the highly regulated markets. As the country is the biggest vaccine exporter, about 65-70% of the World Health Organization (WHO) vaccine requirements are sourced from India.
Export Destinations
India exports pharmaceutical products to North America, Africa, the EU, ASEAN, Latin America & Caribbean (LAC), the Middle East, Asia, CIS, and other European regions. During FY24, India has exported to over 200 countries across the world. Around 70% India’s exports are to highly regulated markets like North America and Europe. The top 5 export destinations for Indian Pharma Industry in 2023-24 were the USA, UK, South Africa, Netherland, and France.
The USA, UK, and South Africa were among the largest importers from India at a share of 31.35%, 2.82%, and 2.58%, respectively during 2023-24. India’s exports of pharma products to these countries in FY24 were USA with US$ 8.73 billion, UK with US$ 784.32 million, South Africa with US$ 718.54 million, the Netherland with US$ 699.16 million, and France with US$ 667.49 million.
As per the latest industry data of the USFDA, market authorizations granted to Indian formulations companies with USFDA approvals stood at 6,316, which is highest in comparison to any other country as of April 2023. A total of 410 Type II DMFs were submitted in the first half of 2023 as opposed to 350 in the first half of 2022, marking an increase of 17%. Additionally, the number of DMFs (Type ii Active) filed by the Indian firms till January 2023 stood at 4,505. USFDA inspections were not conducted during the last couple of years due to the COVID-19 pandemic, however, the inspections have started happening now and are expected to further increase Indian exports to the USA.
Government Initiatives
The Government of India has set up several schemes to further strengthen the pharmaceutical industry. The Strengthening of Pharmaceutical Industry (SPI) scheme focuses on bolstering the existing infrastructure facility, with a total financial outlay of Rs. 500 crore (US$ 64.5 million).
The Production Linked Incentive (PLI) scheme supports domestic manufacturing of 41 critical pharmaceutical ingredients with a total outlay of Rs. 6,940 crore (US$ 834 million) until 2029-30. As of September 2023, 48 projects were approved, attracting Rs. 3,938.57 crore (US$ 473 million) investment and creating 9,618 jobs. 27 projects have been commissioned, with Rs. 3,063 crore (US$ 368 million) grounded investment and 2,777 jobs. In FY23, Rs. 4.34 crore (US$ 0.52 million) incentive was released to eligible applicants.
Production Linked Incentive (PLI) schemes for pharmaceuticals, a critical key starting material (KSMs), medical devices, bulk drug parks, etc. are introduced to encourage manufacturers. Through the PLI scheme, the Government of India hopes to increase investment and production in the Indian pharmaceutical sector. The scheme is expected to generate incremental sales of Rs. 2,94,000 crore (US$ 37.09 billion) in six years, starting from 2022-23 to 2027-28.
For the promotion of the Indian pharmaceutical industry, the Pharmaceutical Promotion and Development Scheme (PPDS) was introduced in 2017 with financial support for conducting seminars, conferences, exhibitions and delegations.
Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS) was implemented to facilitate small and medium-sized enterprises (SMEs) to attain WHO-GMP norms. This will enable them to compete on a global scale.
The Pradhan Mantri Bhartiya Janaushadhi Pariyojana’ (PMBJP), was originally launched in 2008 as the “Jan Aushadhi Scheme”. This scheme aims to make quality affordable generic medicines available to all.
Governing Body
Pharmaceutical Export Promotion Council of India (Pharmexcil)
Pharmexcil is a promotion body set up by the Government of India to promote the Indian pharmaceutical industry. The roles of the council are to advise the government, organize seminars and meetings on export-related issues, organize business meetings in India and abroad and organize trade delegations. The council also assists its members in getting Market Access Incentive (MAI) claims from the Government of India.
Department of Pharmaceuticals
The Department of Pharmaceuticals was formed in 2008 to focus on the development of the pharmaceutical sector in the country. The key functions of the department are to ensure the availability of drugs at reasonable prices, proper functioning of Central Pharma Undertakings, support projects and revival of schemes, ensure proper management, develop human resources and infrastructure, formulate schemes & projects and formulate an annual plan, budget and monitoring of budget expenditure.
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