India's pharmaceutical sector is a global leader in the production of generic drugs and vaccines. It supplies over 50% of the global demand for vaccines, 40% of the generic drug demand in the US, and 25% of all medicines in the UK. India is also the third-largest producer of drugs by volume and has the largest number of USFDA-compliant plants outside the US.
India is among the top 12 destinations for biotechnology worldwide and 3rd largest destination for biotechnology in Asia Pacific. The country holds 3-5% of the global biotechnology industry pie. In 2022, India’s bioeconomy was valued at US$ 137 billion and aims to achieve US$ 300 billion mark by 2030. The Indian healthcare industry reached over US$ 370 billion in 2022 and is expected to reach over US$ 610 billion by 2026. About 20% of the global exports in generic drugs are met by India.
During FY18 to FY23, the Indian pharmaceutical industry logged a compound annual growth rate (CAGR) of 6-8%, primarily driven by an 8% increase in exports and a 6% rise in the domestic market.
The domestic pharmaceutical sector expects sales to grow 8-10% in the financial year 2023-24, indicated an analysis done by CRISIL, a global analytical research and rating agency.
Access to affordable HIV treatment from India is one of the greatest success stories in medicine. India is one of the biggest suppliers of low-cost vaccines in the world. Because of the low price and high quality, Indian medicines are preferred worldwide, thereby rightly making the country the ‘Pharmacy of the World’.
According to a recent EY FICCI report, as there has been a growing consensus over providing new innovative therapies to patients, Indian pharmaceutical market is estimated to touch US$ 130 billion in value by the end of 2030. Meanwhile, the global market size of pharmaceutical products is estimated to cross over the US$ 1 trillion mark in 2023.s
The presence of a skilled workforce as well as high managerial and technical competence is a source of attraction for private players. Pharma companies have already increased spending in the country to tap rural markets and develop better infrastructure.
Indian pharmaceutical sector supplies over 50% of the global demand for various vaccines, 40% of the generic demand for the US and 25% of all medicines for the UK. According to the Indian The Indian pharmaceutical market reached a turnover of Rs. 1.93 lakh crore (~US$ 23 billion) to grow 6.8% in calendar year 2023. The Indian pharmaceuticals industry is expected to grow 9-11% in the financial year 2024, as per ICRA.
The Indian Pharmaceuticals sector has seen some major developments, investments, and support from the government in the recent past.
The Indian pharmaceutical industry has seen a massive expansion over the last few years and is expected to reach about 13% of the size of the global pharma market while enhancing its quality, affordability, and innovation.
Exports of drugs and pharmaceuticals recorded a strong y-o-y growth of 9.7% during April-March FY24.
Indian hospital market valued at US$ 98.98 billion in FY23 and projected to grow by 8% CAGR and reached to US$ 193.59 billion by FY32.
The FDI equity inflow in the Drugs and Pharmaceuticals industry is Rs. 2,00,166 crore (US$ 23.41 billion) during the period April 2000-March 2025.
India’s drugs and pharmaceuticals exports stood at Rs. 2,59,658 crore (US$ 30.38 billion) in FY25 and Rs. 2,43,119 crore (US$ 27.82 billion) in FY24.
India is emerging as a key player in the global pharmaceutical supply chain, with its CRDMO industry set to double to Rs. 1,21,282 crore (US$ 14 billion) by 2028, says Macquarie.
India's medical technology industry is poised to reach exports of up to US$ 20 billion (Rs. 1,69,000 crore) by FY30, according to the CII.
Exports of Drugs & Pharmaceuticals increased by 7.11% to US$ 2.56 billion in September 2024 from US$ 2.36 billion in September 2023.
Cipla received approval from the Central Drugs Standard Control Organization (CDSCO) to market the novel antibiotic plazomicin in India for the treatment of complicated urinary tract infections (cUTI) affecting approximately 150 million patients each year.
The government has set an ambitious target to boost the medical devices industry in India, aiming to elevate it from its current US$ 11 billion valuation to US$ 50 billion by 2030.
In March 2024, Union Minister for Chemicals & Fertilizers and Health & Family Welfare Dr. Mansukh Mandaviya inaugurated 27 greenfield bulk drug park projects and 13 greenfield manufacturing plants for medical devices.
Indian pharmaceutical companies are projected to achieve a revenue growth of 9-11% in FY25. This growth is expected to be fuelled by robust performances in key markets, including the United States, Europe, and emerging regions.
The Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) has reached a noteworthy milestone, achieving sales of Rs. 1,000 crore (US$ 119 million) in October 2024.
A Centrum report highlights that government initiatives like the Production-Linked Incentive and Bulk Drug Parks will boost India's pharma sector by reducing costs, enhancing competitiveness, and attracting investment, with US$ 353.4 million allocated for bulk drug production.
In November 2023, Lupin Ltd. unveiled the world’s first fixed-dose triple combination drug for managing chronic obstructive pulmonary disease (COPD).
In October 2023, Glenmark Pharmaceuticals introduced Zita, a cost-effective triple combination drug for Type 2 diabetes treatment, enhancing glycaemic control in diabetic patients.
In August 2023, Union Minister for Labour & Employment and Environment, Forest and Climate Change Mr. Bhupender Yadav launched Chemotherapy Services in 30 ESIC Hospitals across the country.
An MoU was signed on June 4, 2023, between the Indian Pharmacopoeia Commission (IPC), Ministry of Health & Family Welfare, Government of India and Ministry of Health, Government of Suriname for Recognition of Indian Pharmacopoeia (IP) in Suriname.
In May 2023, the Ministry of Minority Affairs and the Ministry of Ayush joined hands to advance the Unani System of Medicine in India.
Prime Minister Mr. Narendra Modi during his Independence Day 2023 speech said that the government has plans to increase the number of 'Jan Aushadhi Kendras' from 10,000 to 25,000.
As of September 4, 2023, 450,164,619 Ayushman Bharat Health Accounts have been created and 224,967 doctors and 218,602 health facilities have been registered in ABDM.
The Department of Pharmaceuticals will soon launch the Scheme for the Promotion of Research and Innovation in Pharma (PRIP) MedTech Sector. The scheme has been approved by the Union Cabinet for a period of five years starting from 2023-24 to 2027-28 with a total outlay of Rs. 5,000 crore (US$ 604.5 million).
India’s pharmaceutical R&D sector is projected to receive Rs. 17,000 crore (US$ 2 billion) in investments by FY28, according to Pharma Secretary Mr. Amit Agrawal. The government is boosting pharma and MedTech R&D under the Rs. 720.97 crore (US$ 82.5 million) PRIP scheme, establishing Centres of Excellence at NIPER and funding private-sector research on a milestone basis.
Emcure Pharmaceuticals Limited (EPL) becomes the first ever company to launch Orofer FCM 750, a new extension of its parenteral iron brand containing Ferric carboxymaltose (FCM). The dose is suitable for the majority of Indian patients with iron deficiency and iron deficiency anaemia.
Japanese companies have been invited to invest in the Indian Pharmaceutical and Medical Device Industry. The cooperation between Pharmaceutical Traders Association and Japan Federation of Medical Devices Associations of the two countries can contribute to stabilize the global supply-chain especially of APIs and Medical Devices.
Union Budget 2025-26:
- The Union Budget 2025-26 proposes to allocate Rs. 5,268.72 crore (US$ 602.90 million) for the Department of Pharmaceuticals (DoP), around 28.8% higher than the Rs. 4,089.95 crore (US$ 468.01 million) Budget Estimates (BE) for the FY25.
Interim Budget 2024-25:
- The government earmarked Rs. 1,000 crore (US$ 120 million) for the promotion of bulk drug parks for FY25, a significant increase from the previous year.
- The total outlay for the development of the pharmaceutical industry for FY25 was increased to Rs. 1,300 crore (US$ 156.5 million) while the budget for the promotion of medical device parks was raised to Rs. 150 crore (US$ 18 million) for FY25.
- The allocation for assistance to medical device clusters for common facilities (AMD-CF) was pegged at Rs. 40 crore (US$ 4.1 million) for FY25.
- The outlay for the Jan Aushadhi scheme, the initiative to provide affordable generic medicines in the country, was hiked to Rs. 284.5 crore (US$ 34 million) for FY25, up from Rs. 110 crore (US$ 13 million) in the revised estimate for FY24.
As per the Union Budget 2023-24:
- A mission to eliminate sickle cell anaemia by 2047 will be launched. It would involve raising awareness, conducting a comprehensive screening of seven crore individuals in the impacted tribal regions between the ages of 0-40, and providing counselling through coordinated efforts.
- The government would also facilitate select ICMR labs with facilities like research by both public and private medical collage faculty’s alongside, private sector R&D teams.
- For innovation in the pharmaceutical sector, through centres of excellence, a new initiative to encourage pharmaceutical research and innovation will be implemented. The government persuades business to spend money on R&D in a few chosen priority fields. At the grassroots level, government has also announced on building 157 nursing colleges in co-location with government medical colleges.
The Economic Survey 2022–23 has shown India's domestic pharmaceutical market is anticipated to reach US$ 130 billion by 2030, and the pharma sector has maintained its growing pace following the pandemic. The Ayushman Bharat Digital Mission seeks to provide the framework required to sustain the nation's integrated digital health infrastructure as well. The digitalisation, innovation and Research & Development in the pharma sector will help India maintain its leading role globally.
India’s healthcare sector is projected to reach US$ 320 billion (Rs. 27,28,320 crore) by 2028, according to the latest report by Great Place to Work.
India is the 3rd largest producer of API accounting for an 8% share of the Global API Industry. About 500+ different APIs are manufactured in India, and it contributes 57% of APIs to prequalified list of the WHO.
The Contract Research and Manufacturing Services industry (CRAMS) is expected to reach US$ 20 billion by 2024 and is expected to grow at a CAGR of 12%.
In March 2022, Themis Medicare Ltd. (Themis), announced the approval of its antiviral drug VIRALEX by the Drug Controller General of India (DCGI).
Biotechnology Industry Research Assistance Council (BIRAC) under Department of Biotechnologies offers funding assistance through initiatives such as the Biotechnology Ignition Grant (BIG), Sustainable Entrepreneurship and Enterprise Development (SEED), and Launching Entrepreneurial Driven Affordable Products (LEAP) schemes. The funding ranges from Rs. 30 Lakh (US$ 35,824.41) to Rs. 100 Lakhs (US$ 1,19,414.70) per startup, enabling them to refine their ideas.
To achieve self-reliance and minimise import dependency in the country's essential bulk drugs, the Department of Pharmaceuticals initiated a PLI scheme to promote domestic manufacturing by setting up greenfield plants with minimum domestic value addition in four separates ‘Target Segments’ with a cumulative outlay of Rs. 6,940 crore (US$ 951.27 million) from FY21 to FY30.
The Indian government disbursed Rs. 604 crore (US$ 69.76 million) under the Production-Linked Incentive (PLI) scheme for the pharma sector during H1 of FY25.
India being the 3rd largest pharmaceuticals industry in the world by volume offers a positive growth trajectory in the coming years.
Over the next five years, India's medical spending is expected to increase by 9–12% placing it among the top 10 nations worldwide. The ability of companies to orient their product portfolio towards chronic therapies for diseases like cardiovascular, anti-diabetes, anti-depressants, and anti-cancers, which are on the rise, will also play a role in future domestic sales growth. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit Indian pharmaceutical companies.
