India’s pharma industry is expanding at a lightning speed, and the country is strongly placed as a world leader. A recent report by McKinsey & Company cites the performance of the sector, with 8% compound annual growth rate (CAGR) and 9% exports in 2024. The numbers place India well ahead of the world average with its increasing ability to produce and reach out globally.
Currently, the growth driver in India is APIs and biotech.
The sector’s phenomenal growth is fueled by its advancement in active pharmaceutical ingredients (APIs) and biotechnology. India is now the world’s largest generic medicine exporter, supplying 20 percent of the world’s pharmaceutical needs.The country exports more than 40 percent of generic medicine to the US and 25 percent to the UK and significantly contributes to international healthcare by offering 60 percent of the vaccines and 70 percent of the antiretroviral drugs used in the treatment of HIV.
Innovation in New-Age Therapies
Though India has traditionally been the biggest producer of traditional medicine, innovation in new treatment segments is making waves. New segments like mRNA technology, cell and gene therapies, and antibody-based medicines are seeing 13-14% CAGR, beating traditional pharma industry growth rates. It is a harbinger of things for India’s transition from merely a production hub to an innovation-driven player in the healthcare sector.
Strengthening Compliance & Infrastructure
With increased demand across the globe comes the requirement for strong regulatory compliance. India has come a long way in this regard, with USFDA-registered generic manufacturing facilities increasing to 752 in 2024. India also has 2,050 WHO GMP and 286 EDQM-approved facilities. On top of that, compliance results have transformed immensely, with USFDA’s ‘official action indicated’ (OAI) cases decreasing by 50 per cent in the last decade.
A Green Pharma Tomorrow
With growth of the industry increasing comes also an increasing voice for sustainability. A growing focus on green manufacturing has led 10 of the largest 20 pharma companies in India to pledge 30 per cent reduction in carbon emission by 2030. From maintaining adherence to global environmental practices to positioning itself in sustainable health manufacturing tomorrow, transitioning into an environmentally friendly production is the future of the industry.
Overcoming Challenges & Embracing Change
Despite making remarkable gains, the Indian pharma industry faces challenges that could redefine the way it does business. In the wake of digitalization, smart automation, and novel treatment approaches, it is necessary to change. Changing global geopolitics and nearshoring are likely to impact supply chains and international positioning as well.
“India’s pharmaceutical industry is robust today due to what it has built over the past decade,” said Vishnukaant Pitty, Partner, McKinsey & Company. “In light of the upcoming disruptions, the industry ought to adopt strategic revolutions and reinvent its operating model to release a high-performance future.”
Conclusion
The Indian pharmaceutical industry stands at a crossroads. With double-digit growth, path-breaking technology, and unbending commitment to sustainability, the industry is looking towards an exhilarating future. As it realigns to new trends and globalization, the Indian pharma industry is looking to become an industry to watch out for that sets the pace for the world’s future of healthcare.
