Indian Economy News

Indian pharma industry to hit US$ 57 billion by FY25

  • IBEF
  • July 11, 2023

According to a report by CareEdge Ratings, the domestic pharmaceutical industry would likely reach US$ 57 billion by FY25 and see an increase in operating margins of 100-150 basis points (bps).

The Indian pharmaceutical business experienced a compound annual growth rate (CAGR) of 6-8% from FY18 to FY23, mostly due to an 8% increase in exports and a 6% increase in the domestic market. The Indian pharmaceutical market grew by about 5% in FY23, reaching US$ 49.78 billion. The local market expanded 7% year-over-year, while exports only increased by a meagre 3%.

As per Mr. Krunal Modi, Associate Director, CareEdge Ratings, “The Indian pharma sector is expected to grow at a steady pace in the medium term due to structural factors such as ageing of the population, rising lifestyle or chronic diseases, healthcare awareness, and insurance penetration apart from increasing government spending under various schemes.” He further added that shifting global demography and complicated and speciality generic products are also anticipated to fuel Indian pharmaceutical companies' export expansion. The patent expiration in regulated markets would also boost export growth.

CareEdge Ratings is expecting higher growth rates for exports for emerging markets as compared to the developed markets. The Indian pharma industry is expected to see a growth of around 7-8% over FY24-FY25 while the operating profitability of formulation companies to improve to around 23-23.5% and that of active pharmaceutical ingredients (APIs)/ bulk drug companies to improve to around 19-20% during the same period.

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