The Rise and Rise of Indian Pharmaceuticals Industry
The persistent COVID-19 pandemic has revealed the significance of a strong domestic pharmaceutical sector in any economy. It is imperative to have strong manufacturing for pharma products, accompanied with robust infrastructure and marketing linkages, to provide accessible and affordable pharmaceuticals to the domestic and global customers. India, in this regard, has done exceptionally well. Despite several lockdowns and public health challenges, the sector has shown immense growth in domestic and global production.
The sector witnessed a growth of 103 per cent in its exports since 2013-14, from INR 90, 415 crores in 2013-14 to INR 1,83,422 crores in 2021-22. The exports attained in 2021-22 have been flagged as the sector’s best export performance ever. This shows a remarkable growth with exports growing by almost $ 10 billion in 8 years. The pharma exports in 2021-22 sustained a positive growth despite the global trade disruptions and drop in demand for COVID related medicines, owing to the dip in infections and positivity rates. The extraordinary exports growth has been achieved combating the frequent lockdowns and global supply chain disruptions. The domestic industry additionally played a pivotal role in fighting against the Covid-19 pandemic and positioning itself as a reliable and undeviating partner in dealing with a global health crisis. The Indian vaccine industry developed Covid vaccine with indigenous technology in collaboration with India’s research institution like ICMR and NIV within record time, on par with highly developed countries like America and EU. The production provided 115 million doses of vaccines to more than 97 countries.
Additionally, the trade balance continues to be in India’s favour, with a trade surplus of $ 15175.81 Million. The country ranks 3rd for production by volume and 14th by value in the global market. The share of pharmaceutical and drugs in our global exports is 5.92 per cent. Formulations and biologicals continue to account for a major share of 73.31 per cent in our total exports, followed by bulk drugs and drug intermediates with exports of $ 4437.64 million. India’s top 5 pharma export destinations are USA, UK, South Africa, Russia and Nigeria. It is further pivotal to highlight that around 55 per cent of our pharma exports cater to highly regulated markets. Moreover, Indian pharma companies have a substantial share in the prescription market in the US and EU. India has the largest number of Food and Drug Administration (FDA) approved plants, after US and EU. The investments in this sector have also remained unhindered. During the first wave of the pandemic, the country saw FDI inflow of $ 397 million in the pharmaceutical sector.
The stellar performance of the Indian pharma industry, despite the ongoing pandemic, has been owed to the domestic manufacturing excellence, strong infrastructure, cost competitiveness, continued investment, entrepreneurship efforts and rapid innovations that the sector has witnessed. The current market size of the Indian pharmaceutical industry is around $ 50 billion.
Indian pharma companies enabled by their price competitiveness and good quality, have made a global mark, with 60 per cent of the world’s vaccines and 20 per cent of generic medicines coming from India. In furtherance to this, the sector is making strides in enhancing its global access. For instance, as a part of the country’s trade agreements, India has signed cooperation agreements with UAE and Australia. This will not only widen the global audience for domestic pharma products, but will also provide greater insight into product enhancement and enable a knowledge sharing base for innovation and investments.
The country has successfully transitioned from a traditional family-owned pharmaceutical enterprises to professional and entrepreneurial establishments. These establishments have further attracted a significant global audience. This has underlined an emergent local industry in the pharmaceuticals sector, one that is on the path for greater global reach, in addition to generating several employment opportunities for individuals in the country. Thus, moving forward, it is pertinent to establish backward and forward linkages with both domestic and global stakeholders, while focusing on the strengths of the sector for better innovations in product development.
This has been co-authored by Ishita Sirsikar and Srijata Deb.