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Here is the complete overview of the pharma industry in India along with the production capacity, market size, growth, and investment.
In today’s world, our country is one of the largest suppliers of generic drugs all over the world and it’s widely acclaimed for its budget-friendly vaccines and medications. The Pharma industry in India is at present ranks third globally in terms of volume and still sky-rocketing with a 9.43% CAGR from around a decade.
Overview of Pharma Industry in India
Over-the-counter medications, generic drugs, vaccines, and R&D are the major components and tasks for the Pharma Industry of India. India has one of the largest quantities of medicine manufacturing facilities and over 500 API producers which constitute more than 8% of the global market.
The pharma sector of India provides around 50% of all the world consumption for several vaccines, more than 40% of generic drug consumption in the United States, and over 25% of all the Pharma requirements for the UK. India’s home Pharma industry comprises a network of over 3,000 drug companies and more than 10,500 manufacturing units.
Moreover, the country has a crucial position in the Pharma industry all around the globe, with a huge pool of researchers and talents with a brain to take the Pharma industry to a new benchmark. Today, 80% of global AIDS medicine is provided by Indian Pharma Sector therefore it’s known as the pharmacy of the globe since it offers high-quality medicines at budget-friendly prices.
Pharma Industry: Market Size
As per the report from the Indian Economic Survey, the Pharma industry of India is about to turn three-fold within around a decade. In 2021, the Pharma industry is around US $42 Bn. and expected to grow up to US $65 Bn within 3 years by 2024 which further holds the potential to develop to over US $130 Bn. by the end of the decade as per Secretary General, Mr. Sudarshan Jain from of Indian Pharmaceutical Alliance (IPA).
The pharma sector of India is increasing at an annual CAGR of 37% in 5 years till 2025. On August 21, as per the report of CARE ratings, the pharma market is likely to grow at the rate of 11% annually in a couple of years to touch the mark of US $60 Bn.
India is one of the largest countries for the supplier of generic medicines that constitute around 20% of the total global supply by quantity and around 60% for vaccines. Globally the market size of the Pharma Industry of India holds a value of over US $42 Bn and rapidly shooting up at the pace of 17% annually. For the FY 2022-23, as per the India Ratings and Research, the country’s pharma sector will be over 12% growth.
Indian Pharma Industry: Exports
The pharma industry of India is known to be the 12th largest exporter of medical supplies to all around the globe whereas UK and USA are the major importers due to affordability and high-quality medicines and vaccines. The country exports around 20% of the global demand for generic drugs, making it the largest exporter of OTC and generic medicines.
Indian drug & pharmaceutical exports stood at US$ 24.60 billion in FY22 and US$ 24.44 billion in FY21. Indian drug & pharmaceutical exports stood at US$ 2,119.08 million in June 2022. 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.
India’s export of drugs and medicines accounts for over US $2052 Mn. On September 22 and comprise around 6.3% of the total monthly export. 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.
Pharma Industry: Developments & Growth
The Pharma sector of India plays a pivot role in the worldwide Pharma industry and India holds the 3rd position all over the globe in terms of volume and 14th by value.
Recently during the pandemic era and after that, various forms of incentives and investments have been provided to the Indian Pharma industry to develop its core efficiency and take it to new heights. Here is the major recent Indian government aid to the Pharma industry of India.
1. The Drug and Pharma Sector of India has been provided with an FDI of value over US $19.41 Bn from April 2000 to March 2022.
2. Between the years 2021 and 2022, the FDI inflow for the respective sector accounted for US $1414 Mn.
3. In the current fiscal year, the Pharma sector of India generated a trade surplus of over US $15.81 Bn.
4. The medical equipment companies combined have analyzed to reach US $50 Bn with a compounded growth rate of 15% annually.
5. The GOI has given its nod for the amendment of existing FDI policy in the pharmaceutical sector to allow FDI up to 100% under the automatic route for manufacturing medical devices subject to certain conditions.
6. The Government has approved providing Incentives worth INR 21,940 Crore ($3 Bn).
7. The Indian Pharma sector offers medicine and vaccines at a 33% lower cost of manufacturing than Western markets.
8. India has the highest number of US-FDA-compliant plants outside the US. India has the second-highest number of United States Food and Drug Administration (USFDA) approved facilities and labor costs in India are lower than other manufacturing hubs by up to 40%.
9. In September 2021, the Indian government contributed US$ 4 billion to the pharmaceutical and medical industries.
Government Investments and Schemes
Here are the key Indian Government investment and schemes launched by the Union Cabinet to promote the growth of the Pharma Industry of India.
In the union budget of 2022-23, over Rs. 83000 Crores has been provided for the development of the Ministry of Health and Family Welfare whereas Rs. 3,201 Crores has been allocated for the R&D of the Pharma sector.
The Ministry of AYUSH has been allocated Rs. 3,050 crore (US$ 399.4 million), up from Rs. 2,970 crore (US$ 389 million). In 2021, under Atmanirbhar Bharat 3.0, Mission COVID Suraksha was announced by the Government of India to accelerate the development and production of indigenous COVID vaccines.
To augment the capacity of indigenous production of Covaxin under the mission, the Department of Biotechnology, Government of India, provided financial support in the form of a grant to vaccine manufacturing facilities for enhanced production capacities.
In August 2021, Union Health Minister announced that an additional number of Pharma companies in India are expected to commence manufacturing of anti-coronavirus vaccines.
Wrapping up on the Pharma Industry of India
The Pharma industry of India is a crucial part of the development of the country as well as plays a vital role in the country’s foreign trade and great potential market for investors. Medicine spending in India is projected to grow 9-12% over the next five years, leading India to become one of the top 10 countries in terms of medical spending.
Despite recent headwinds, the Pharmaceutical industry in India has grown rapidly. India is likely to become one of the top 3 Pharmaceutical industries by 2030. Increasing demand in global markets: Generic penetration in high-value healthcare markets (e.g., US) is growing significantly.