India pharma exports surge 9%, outpacing global average, says report

India’s pharmaceutical sector, the world’s largest supplier of generic medicines, is entering a new growth phase, with exports increasing at 9%—nearly double the global average, according to a McKinsey & Company report. The country now supplies 20% of global demand, including 40% of the US’s generic drug needs and 25% of the United Kingdom (UK) market. India has also surpassed the United States (US) in Food and Drug Administration (FDA)-registered manufacturing sites, boasting 752 FDA-approved, 2,050 WHO (World Health Organisation) Good Manufacturing Practices (GMP)-certified, and 286 European Directorate for the Quality of Medicines (EDQM)-approved plants as of 2024. Compliance has improved significantly, with US FDA Official Action Indicated (OAI) instances dropping by 50% in the last decade and European Medicines Agency (EMA) non-compliance cases falling by 27%. Additionally, India maintains a 30-35% cost advantage over the US and European manufacturers due to lower labour costs, efficiency improvements, and digital adoption. 

The sector has grown at an 8% Compound Annual Growth Rate (CAGR), strengthening active pharmaceutical ingredients (APIs) and biotechnology capabilities. Advanced treatments like mRNA, cell and gene therapies, and monoclonal antibodies expand at a 13-14% CAGR, outpacing conventional drugs. Artificial Intelligence (AI) and generative AI innovations could unlock Rs. 5,23,740 crore - Rs. 9,61,190 crore (US$ 60 billion - US$ 110 billion) in additional revenue, improve margins by 4-7%, and boost productivity by 50%. The top five Indian Contract Development and Manufacturing Organizations (CDMOs) have invested Rs. 56,73 crore (US$ 650 million) to expand operations, solidifying India’s role in global pharma supply chains. However, challenges such as digital transformation, automation, nearshoring trends, and sustainability demands could reshape the industry. The report suggests that Indian pharma companies focus on zero-error operations, AI adoption, cost optimization, and sustainability to maintain global leadership. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.