Advantage India
Cost
Efficiency
* India has emerged as the medial tourism hub of the world providing cost-effective treatments with the latest technology enabled by several pathbreaking reforms and provisions in healthcare sector.
* Access to affordable HIV treatment from India is one of the greatest success stories in medicine. India is one of the biggest suppliers of low-cost vaccines in the world, thereby rightly making it the ‘Pharmacy of the World’.
Economic
Drivers
*According to Bain & Co, the Indian Pharmaceutical market stood at Rs. 4,71,295 crore (US$ 55 billion) in 2025 and is expected to grow to Rs. 10,28,280-11,13,970 crore (US$ 120-130 billion) by 2030.
*In FY24 domestic consumption was valued at Rs. 2,01,372 crore (US$ 23.5 billion).
*The pharmaceutical industry’s total turnover stood at Rs. 2,25,000 crore (US$ 26.26 billion) in FY25 lead by cardiac, gastrointestinal and anti-diabetic segments.
*India has the largest number of USFDA-compliant plants outside the US and over 2,000 WHO-GMP approved facilities, exporting to 150+ countries.
*CRDMO industry expected to double to Rs. 1,21,282 crore (US$ 14 billion) by 2028, reinforcing India’s role in global supply chains.
Policy
Support
*PLI scheme: Rs. 15,000 crore (US$ 2.04 billion) outlay (2020-21 to 2028-29) to boost manufacturing, investment, and product diversification.
*On December 5, 2025, India announced a Rs. 60,000 crore (US$ 7 billion) API-push to boost domestic pharmaceutical manufacturing and cut import dependence.
*Under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana, 16,912 Jan Aushadhi Kendras are operational as of June 30, 2025, with a target of 25,000 by March 2027, offering 2,110 medicines and 315 devices/consumables to promote affordable quality generic healthcare.
*Government disbursed Rs. 604 crore (US$ 69.76 million) under the PLI scheme in H1 FY25.
Increasing
Investment
*FDI policy: Up to 100% FDI allowed via automatic route for Greenfield pharma projects; up to 74% for Brownfield via automatic, beyond that with government approval.
*The Drugs & Pharmaceuticals sector received FDI inflow of Rs. 2,10,940 crore (US$ 24.62 billion) from April 2000-June 2025.
*Union Budget 2025-26: Allocation of Rs. 5,268 crore (US$ 602 million) for the Department of Pharmaceuticals, up 28.8% over previous budget estimates.
Introduction
India is the largest provider of generic drugs globally and is renowned for its affordable vaccines and high-quality medicines. Over the years, the Indian pharmaceutical industry has evolved into a vibrant sector, currently ranked third in pharmaceutical production by volume and 14th in terms of value. The industry has grown at a CAGR of 9.43% over the past nine years and contributes around 1.72% to India’s GDP.
Key segments of the industry include generic drugs, over-the-counter medications, bulk drugs, vaccines, biosimilars, biologics, and contract research and manufacturing. India has the highest number of pharmaceutical manufacturing facilities compliant with US FDA standards and hosts over 500 active pharmaceutical ingredient (API) producers, accounting for approximately 8% of the global API market.
As of May 2025, India supplies 55-60% of UNICEF’s vaccines, meets 99% of WHO’s DPT vaccine demand, and provides 52% of BCG and 45% of measles vaccines. The domestic pharmaceutical ecosystem comprises around 3,000 drug companies and roughly 10,500 manufacturing units, supported by a large pool of skilled scientists and engineers. Over 80% of antiretroviral drugs used globally to combat AIDS are supplied by Indian firms, reinforcing India’s reputation as the “pharmacy of the world.”
According to Bain & Co, the Indian pharmaceutical market was valued at Rs. 4,71,295 crore (US$ 55 billion) in 2025 and is projected to reach Rs. 10,28,280-11,13,970 crore (US$ 120-130 billion) by 2030. The sector is the fifth-largest contributor to manufacturing GVA, drives about 4% of India’s FDI inflows, sustains a trade surplus of Rs. 1,62,811 crore (US$ 19 billion) and supports approximately 2.7 million livelihoods directly or indirectly.
Market size
The Indian hospital market was valued at US$ 98.98 billion in FY23 and is projected to grow at a CAGR of 8%, reaching US$ 193.59 billion by FY32. India is also among the top 12 destinations for biotechnology globally and ranks third in Asia Pacific, holding 3-5% of the global biotechnology industry.
The country’s biosimilars market is estimated to grow at a CAGR of 22%, reaching US$ 12 billion by 2025, representing nearly 20% of India’s total pharmaceutical market. As of November 2024, India is the third-largest producer of active pharmaceutical ingredients (APIs), contributing an 8% share of the global API industry. Over 500 different APIs are manufactured in India, which accounts for 57% of WHO-prequalified APIs. The government has set ambitious targets for the medical devices industry, aiming to expand its valuation from Rs. 1,02,564 crore (US$ 12 billion) in 2023-24 to Rs. 4,27,350 crore (US$ 50 billion) by 2030. Domestic pharmaceutical consumption in FY24 was valued at Rs. 2,01,372 crore (US$ 23.5 billion).
Indian pharmaceutical companies hold a significant share in the prescription markets of the US and EU, with India hosting the largest number of FDA-approved manufacturing plants outside the US. Globally, India is a major supplier of generic medications, providing 20% of the worldwide supply by volume and fulfilling around 60% of global vaccination demand.
Exports
Pharmaceutical is one of the top ten attractive sectors for foreign investment in India. The pharmaceutical exports from India reach more than 200 nations around the world, including highly regulated markets of the USA, West Europe, Japan, and Australia. India supplied around 45 tonnes and 400 million tablets of hydroxychloroquine to around 114 countries globally.
India’s drugs and pharmaceuticals exports stood at Rs. 2,59,658 crore (US$ 30.38 billion) in FY25 and Rs. 2,43,119 crore (US$ 27.82 billion) in FY24.
India's medical technology industry is poised to reach exports of up to US$ 20 billion (Rs. 1,69,000) by FY30, according to the CII.
India is the 12th largest exporter of medical goods in the world. Indian drugs are exported to more than 200 countries in the world, with US being the key market. Generic drugs account for 20% of the global export in terms of volume, making the country the largest provider of generic medicines globally.
As of May 2025, India supplies 55-60% of UNICEF’s vaccines, meets 99% of WHO’s DPT vaccine demand, 52% of BCG vaccines and 45% of measles vaccines, while creating jobs across manufacturing and research.
Recent investments/developments
The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. India ranks third worldwide for production by volume and 14th by value.
In this regard the sector has seen a lot of investments and developments in the recent past.
- On October 28, 2025, Grant Thornton Bharat reported that of the Rs. 29,992 crore (US$ 3.5 billion) in deals recorded this quarter, private deals such as M&A and PE activity accounted for around Rs. 25,707 crore (US$ 3 billion) across 68 transactions in the third quarter.
- In Q1 2025, the Pharma & Healthcare Sector saw 71 deals worth Rs. 22,279 crore (US$ 2.6 Billion).
- In July 2025, Cipla has acquired a 20% stake in Bengaluru based iCaltech innovation aiming to strengthen its respiratory devices and diagnostic portfolio.
- As of February 2025, Parexel a biopharmaceutical company from the US, plans to add over 2,000 employees in India over the next five years.
- Indian pharmaceutical companies are projected to achieve a revenue growth of 9-11% in FY25. This growth is expected to be fuelled by robust performances in key markets, including the United States, Europe, and emerging regions.
- India’s healthcare sector is projected to reach US$ 320 billion (Rs. 27,28,320 crore) by 2028, according to the latest report by Great Place to Work.
- The pharmaceutical sector targets Rs. 11,08,380 crore (US$ 130 billion) by 2030, while biotechnology aims for Rs. 25,57,800 crore (US$ 300 billion) by the same year.
- Sanofi announced its plans to invest US$ 435 million over the next six years to expand its global capability centre (GCC) in Hyderabad, India by increasing the headcount and further developing the facility.
- In the Indian pharmaceutical industry, there were 24 M&A deals announced in Q1 2024, worth a total value of US$ 456.3 million.
- As of 30th June 2024, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognized a total of 1,40,803 entities as startups, of which 2,127 are from the pharmaceutical sector.
- MedGenome has acquired a stake in GenX Diagnostics, a diagnostic lab chain in Odisha. This strategic move combines MedGenome’s advanced science and technological capabilities with GenX’s diagnostics leadership in the East, empowering clinicians in Odisha.
- In March 2024, Union Minister for Chemicals & Fertilizers and Health & Family Welfare Dr. Mansukh Mandaviya inaugurated 27 greenfield bulk drug park projects and 13 greenfield manufacturing plants for medical devices.
- Cipla received approval from the Central Drugs Standard Control Organization (CDSCO) to market the novel antibiotic plazomicin in India for the treatment of complicated urinary tract infections (cUTI) affecting approximately 150 million patients each year.
- For the period 2020-21 to 2027-28, 26 Applicants for manufacturing of Medical Devices have been approved for 138 products under the PLI scheme with total financial outlay of US$ 411.01 million (Rs. 3,420 crore).
- Up to 100%, FDI has been allowed through automatic route for Greenfield pharmaceuticals projects. For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through automatic route and beyond that through government approval.
- The FDI equity inflow in the Drugs and Pharmaceuticals industry is Rs. 2,00,166 crore (US$ 23.41 million) during the period April 2000-March 2025.
- The Department of Pharmaceuticals will soon launch the Scheme for the Promotion of Research and Innovation in Pharma (PRIP) MedTech Sector. The scheme has been approved by the Union Cabinet for a period of five years starting from 2023-24 to 2027-28 with a total outlay of Rs. 5,000 crore (US$ 604.5 million).
- Emcure Pharmaceuticals Limited (EPL) becomes the first ever company to launch Orofer FCM 750, a new extension of its parenteral iron brand containing Ferric carboxymaltose (FCM). The dose is suitable for the majority of Indian patients with iron deficiency and iron deficiency anaemia.
- Japanese companies have been invited to invest in the Indian Pharmaceutical and Medical Device Industry. The cooperation between Pharmaceutical Traders Association and Japan Federation of Medical Devices Associations of the two countries can contribute to stabilize the global supply-chain especially of APIs and Medical Devices.
- Glenmark Pharmaceuticals Ltd. (Glenmark), an innovation-driven, global pharmaceutical company, is the first to launch a unique I.V. injection formulation, Akynzeo I.V., in India for the prevention of chemotherapy-induced nausea and vomiting (CINV), under an exclusive licensing agreement with Helsinn, a Swiss biopharma group company.
- Entod Pharmaceuticals launched its new ocular aesthetic range focused on improving eye comfort and enhancing the aesthetics of the eyes.
- BDR Pharmaceutical launched the first generic apalutamide (brand name Apatide) in India to treat both metastatic castration sensitive prostate cancer as well as non-metastatic castration resistant prostate cancer. The product will be available across India.
- Anglo French Drugs & Industries Limited (AFDIL), a 99-year-old organization in the pharmaceutical sector, announced that it has entered into the fertility space with the launch of the LYBER range.
Government Initiatives
Some of the initiatives taken by the Government to promote the pharmaceutical sector in India are as follows:
- Some of the initiatives taken by the Government to promote the pharmaceutical sector in India are as follows:
- On December 5, 2025, India announced a Rs. 60,000 crore (US$ 7 billion) API-push to boost domestic pharmaceutical manufacturing and cut import dependence.
- On November 15, 2025, Indian Pharmacopoeia Commission signed an MoU with Jharkhand State Pharmacy Council to strengthen pharmacovigilance, materiovigilance and safe-medication practices across Jharkhand.
- As of September 2025, India plans to boost pharmaceutical exports to Russia, the Netherlands and Brazil, leveraging its existing manufacturing capacity to grow into newer markets by about 20% while already counting the United States, the United Kingdom, Brazil, Netherlands and Russia among its key export destinations.
- Under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana, 16,912 Jan Aushadhi Kendras are operational as of June 30, 2025, with a target of 25,000 by March 2027, offering 2,110 medicines and 315 devices/consumables to promote affordable quality generic healthcare. Over the last 11 years, this scheme has saved citizens about Rs. 38,000 crore (US$ 4.43 billion), cutting household out-of-pocket health spending from 63% in FY15 to 39% in FY22.
- Ayushman Bharat Digital Mission (ABDM) has been launched with the aim to enable interoperability of health data within the health ecosystem and creating longitudinal electronic health records of every citizen. ABDM comprises key registries such as the Ayushman Bharat Health Account (ABHA), healthcare professional registry (HPR), health facility registry (HFR), and drug registry.
- As of March 2025, the National Biopharma Mission, with a Rs. 2,142 crore (US$ 250 million) budget co-funded by the World Bank, supports over 101 projects involving more than 150 organisations and 30 MSMEs, has helped establish 11 shared facilities (laboratory/testing/manufacturing), and generated over 1,000 jobs including 304 scientists and researchers.
- As of February 6, 2025, over 73.98 crore Ayushman Bharat Health Accounts (ABHA) have been created, 49.06 crore health records linked, 3.63 lakh health facilities registered, 5.64 lakh healthcare professionals onboarded, and 1.59 lakh facilities using ABDM-enabled software under the Ayushman Bharat Digital Mission.
- The government is boosting pharma and MedTech R&D under the Rs. 720.97 crore (US$ 82.5 million) PRIP scheme, establishing Centres of Excellence at NIPER and funding private-sector research on a milestone basis.
- As per Union Budget 2025-26:
- Rs. 1,400 crore (US$ 163 million) provided to support three mega bulk drug parks across states.
- Total pharma industry budget allocation raised to Rs. 5,268 crore (US$ 614 million).
- Medical device parks promotion budget raised to Rs. 1,460 crore (US$ 170 million).
- In the Interim Budget 2024-25:
- The government earmarked Rs. 1,000 crore (US$ 120 million) for the promotion of bulk drug parks for FY25, a significant increase from the previous year.
- The total outlay for the development of the pharmaceutical industry for FY25 was increased to Rs. 1,300 crore (US$ 156.5 million) while the budget for the promotion of medical device parks was raised to Rs. 150 crore (US$ 18 million) for FY25.
- The allocation for assistance to medical device clusters for common facilities (AMD-CF) was pegged at Rs. 40 crore (US$ 4.1 million) for FY25.
- The outlay for the Jan Aushadhi scheme, the initiative to provide affordable generic medicines in the country, was hiked to Rs. 284.5 crore (US$ 34 million) for FY25, up from Rs. 110 crore (US$ 13 million) in the revised estimate for FY24.
- Ayushman Bharat Digital Mission (ABDM):
- Under the ABDM, citizens will be able to create their ABHA (Ayushman Bharat Health Account) numbers, to which their digital health records can be linked. This will enable creation of longitudinal health records for individuals across various healthcare providers and improve clinical decision making by healthcare providers.
- The pilot of ABDM is completed in the six Union Territories of Ladakh, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Puducherry, Andaman and Nicobar Islands, and Lakshadweep with successful demonstration of technology platform developed by the NHA.
- PLI scheme envisages manufacturing of 41 Bulk Drugs with a total outlay of Rs. 6,940 crore (US$ 838.16 million) during the tenure of the scheme from 2020-21 to 2029-30.
- Scheme for Development of Pharma industry - Umbrella Scheme:
- The Department of Pharmaceuticals has prepared an Umbrella Scheme namely ‘Scheme for Development of Pharma industry.’ Which comprises of the following sub schemes:
- Assistance to Bulk Drug Industry for Common Facilitation Centres
- Assistance to Medical Device Industry for Common Facilitation Centres
- Assistance to Pharmaceutical Industry (CDP-PS)
- Pharmaceutical Promotion and Development Scheme (PPDS)
- Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)
- The Department of Pharmaceuticals has prepared an Umbrella Scheme namely ‘Scheme for Development of Pharma industry.’ Which comprises of the following sub schemes:
Road Ahead
The pharmaceutical industry in India is a significant part of the nation's foreign trade and offers lucrative potential for investors. Millions of people around the world receive affordable and inexpensive generic medications from India, which also runs a sizable number of plants that adhere to Good Manufacturing Practices (GMP) standards set by the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA). Among nations that produce pharmaceuticals, India has long held the top spot. 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 medicine spending. Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants, and anti-cancers, which are on the rise. The Indian Government has taken many steps to reduce costs and bring down healthcare expenses. The National Health Protection Scheme, which aims to offer universal healthcare, the ageing population, the rise in chronic diseases, and other government programmes, including the opening of pharmacies that offer inexpensive generic medications, should all contribute to boost the Indian pharmaceutical industry. Speedy introduction of generic drugs into the market has
remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.
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