Snapshot

Indian pharmaceuticals - a formula for success

The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. India ranks 3rd worldwide for production by volume and 14th by value. The nation is the largest provider of generic medicines globally, occupying a 20%  share in global supply by volume, and is the leading vaccine manufacturer globally. India also has the highest number of US-FDA compliant Pharma plants outside of USA and is home to more than 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities as well as a highly skilled resource pool.

The pharmaceutical industry in India offers 60,000 generic brands across 60 therapeutic categories. Major segments include generic drugs, OTC Medicines, API/Bulk Drugs, Vaccines, Contract Research & Manufacturing, Biosimilars and Biologics.

  • Incentives worth INR 21,940 Crore ($3 Bn) are approved 
  • Market size expected to reach $65 bn by 2024, and ~$130 bn by 2030
  • Expected growth rate of 11-12% (2020-2030) 
  • Cost of manufacturing ~ 33% lower than western markets

Indian pharma companies enabled by their price competitiveness and good quality, have made global mark, with 60% of the world’s vaccines and 20% of generic medicines coming from India. 

100% Foreign Direct Investment (FDI) in the Pharmaceutical sector is allowed under the automatic route for greenfield pharmaceuticals.

100% FDI in the pharmaceutical sector is allowed in brownfield pharmaceuticals; wherein 74% is allowed under the automatic route and thereafter through the government approval route.

For further details, please refer FDI Policy

  • %

    Generics medicines exports share (global)

  • $ Bn

    Exports worth (FY 21-22)

  • $ Bn

    FDI (April 2021-March 2022)

Largest vaccine producer in the world

Largest manufacturer and exporter of generic medicines

Industry Scenario

The pharmaceutical industry in India is expected to reach $65 bn by 2024 and to $120 bn by 2030

The pharmaceutical industry in India is currently valued at $50 bn.

India is a major exporter of Pharmaceuticals, with over 200+ countries served by Indian pharma exports. India supplies over 50% of Africa’s requirement for generics, ~40% of generic demand in the US and ~25% of all medicine in the UK .
India also accounts for ~60% of global vaccine demand , and is a leading supplier of DPT, BCG and Measles vaccines. 70% of WHO’s vaccines (as per the essential Immunization schedule) are sourced from India. 

Exports of Drugs & Pharmaceuticals values at $ 2052.78 mn in Septembert 2022 and shares 6.29% of the total exports of the month. The Average Index of Industrial Production of Manufacturing of pharmaceuticals, medicinal chemicals and botanical products in the FY 2021-22 is 221.6 and has grown by 1.3%

For the period 2021-22, export of drugs and pharma products stood at $24.6 bn compared to $24.44 bn as of 2020-21. The Indian pharma industry witnessed exponential growth of 103% during 2014-22 from $11.6 bn to $24.6 bn.

GROWTH DRIVERS

  • Government Support

    Government incentives including an outlay of INR 21940 for PLI 1.0 and PLI 2.0

  • Medical tourism

    Quality services at marginal costs compared to US, Europe, and South Asia

  • Infrastructure development

    India has the highest number of US-FDA compliant plants outside the US

  • Strong drug manufacturing

    Expertise in low cost generic patented drugs as well as end-to-end manufacturing

  • Strong domestic demand

    Launch of the largest National Health Protection Scheme globally

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Production Linked Incentive (PLI) Scheme

The Indian pharmaceuticals market is supported by the following Production Linked Incentive Schemes to boost domestic manufacturing capacity, including high-value products across the global supply chain.
1. PLI Scheme for Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) (PLI 1.0) 2. Production-Linked Incentive (PLI) Scheme for Pharmaceuticals d (PLI 2.0)

  • Scheme Outlay INR 6,940 crores

    PLI for Bulk Drugs

  • Scheme Outlay INR 15,000 crores

    PLI Scheme for Pharmaceuticals Manufacturing

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GIS - based map displaying available infrastructure for setting up business operations in the state.

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FAQs

Frequently
Asked Questions

What are the skill development measures undertaken in Pharmaceutical sector?

To keep pace with the growing demand for highly skilled R&D professionals the government has undertaken the transformation of National Institutes of Pharmaceutical Education and Research (NIPERs)

For more information, click here.

 

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What principles does National Pharmaceuticals Policy follow while pricing drugs?

The key principles for the regulation of the prices are:
 a) Essentiality of drugs.
 b) Control formulations prices.
 c) Market based pricing.

For more information, click here.

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What is the objective of the Pharmaceutical Promotion Development Scheme?

The objective of Pharmaceutical Promotion Development Scheme (PPDS) is promotion, development and export promotion in Pharmaceutical sector by extending financial support for conduct of seminars, conferences, exhibitions, mounting delegations to and from India for promotion of exports as well as investments, conducting studies/ consultancies for facilitating growth, exports as well as critical issues affecting Pharma sector.

For more information, click here.

 

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What is the cluster development programme for pharma sector?

The CDP scheme is implemented on a Public Private Partnership format through one-time grant-in-aid with aim to enhance Quality, productivity & Innovative capabilities of the SME Pharma sector in the country.

The benefits of the scheme are:

a) Access to world class facility.

b) Cost of production will come down by 20%.

For more information, click here.

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What is a Generic Medicine?

Generic medicines are unbranded medicines which are equally safe and having the same efficacy as that of branded medicines in terms of their therapeutic value. The prices of generic medicines are much cheaper than their branded equivalent.

For more information, click here.

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