India’s Pharma Industry: Trends, Growth, and Key Insights

India, rightly known as the ‘Pharmacy of the World’, is driven by a strong research and innovation ecosystem and robust manufacturing capabilities. The country is the largest producer of generic medicines and vaccines, meeting over 20% of the global demand for generic medications. In addition, India is also a key player in the production of over-the-counter medications, biosimilars, biologics, and contract research and manufacturing.

Let’s delve deeper into the nuances of the pharma sector and the promising future it holds.

Current Trends in the Pharma Industry

India’s pharmaceutical industry is projected to reach a total value of $65 billion by the end of 2024. With impressive growth, the sector’s estimated worth could rise to $130 billion by 2030 and $450 billion by 2047. The pharmaceutical industry contributes 2% to India’s GDP and provides employment to 3.5 million people.

As of June 2024, India is home to over 3,000 pharma companies with more than 10,500 state-of-the-art manufacturing facilities, producing life-saving drugs for the global market. The revenues of India’s pharmaceutical companies are expected to reach $13.16 billion in 2024, and with a CAGR of 4.70%, they are projected to rise to $16.56 billion by 2029.

India’s biotechnology industry, a key stakeholder in the pharma sector, includes bioservices, bio-agriculture, bio-industry, and bioinformatics. Valued at $70 billion in 2020, it is expected to reach $150 billion by 2025, demonstrating strong growth potential. Similarly, the Indian medical devices market, valued at $10.36 billion in 2020, is estimated to exceed $50 billion by 2025.

The above graph reflects positive growth for the Indian pharma industry from 2021 to 2030.

Government Support Initiatives

Several important government initiatives have been implemented to support the growing pharma industry:

National Pharmaceutical Policy (2023): This policy aims to create a framework that addresses challenges faced by Indian pharmaceutical companies through robust and long-lasting interventions and support measures. Key pillars include creating a global pharmaceutical hub, self-sufficiency, health equity, and accessibility.

Liberalised FDI Limit: The government has allowed up to 100% FDI through the automatic route for Greenfield investments and up to 74% for Brownfield investments. This has led to a significant inflow of critical capital funding, with total FDI in this sector reaching $22.52 billion between 2000 and March 2024.

Production Linked Incentive (PLI): There are two versions of this scheme: PLI 1.0 and PLI 2.0. PLI 1.0 focuses on the production of APIs and KSMs, with a total outlay of Rs 6,940 crores for six years until FY 2029-30. PLI 2.0, covering broader pharmaceutical manufacturing, has a total outlay of Rs 15,000 crores. A total of 55 companies, including 20 MSMEs, have been selected under this scheme, with reported sales exceeding Rs 36,000 crores.

Promotion of Bulk Drug Parks: The government will provide financial assistance of up to Rs 1,000 crores for the construction of three bulk drug parks in Himachal Pradesh, Gujarat, and Andhra Pradesh.

Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP): Announced in 2023, this scheme has a financial outlay of Rs 5,000 crores until FY 2027-28. It aims to promote industry-academia linkages for R&D, fueling innovation-led growth in the sector.

Recent Developments in the Pharma Industry

• In the Union Budget 2024, the government announced a fund of Rs 1 lakh crore to support private sector-driven research and innovation on a commercial scale.

• The government allocated Rs 2,143 crores towards PLI in the pharma sector for FY 2024-25.

• The government also announced the removal of basic customs duty on certain cancer drugs and medical equipment.

The government has consistently increased allocation toward the health sector.

Stocks to Watch

Domestic pharma companies have enjoyed impressive growth, with record sales and revenue figures. Below is a list of the best-performing stocks you can add to your watchlist:

Indian pharma companies have experienced a significant bull run over the last year, offering substantial returns to investors.

Conclusion

The Indian pharmaceutical industry is a vital component of the global healthcare ecosystem, providing affordable and high-quality medicines to millions. With its rich history, robust growth, and promising future, the industry is poised to continue its leadership on the world stage, addressing global health challenges and improving lives worldwide.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

The companies mentioned in the article are for information purposes only. This is not an investment advice. Disclaimer: Teji Mandi Disclaimer