Overview of the domestic and global pharmaceutical industry

India's pharmaceutical manufacturing industry stands as a pivotal component of the nation's economy, demonstrating robust growth and a promising outlook for the future. Current Market Size As of 2025, the Indian pharmaceutical market is valued at approximately USD 61.36 billion. The industry ranks third worldwide in pharmaceutical production by volume and 14th by value, supported by a well-established domestic sector comprising around 3,000 drug companies and over 10,000 manufacturing units. India is also the world's largest provider of generic medicines, contributing to 20% of the global supply by volume. Government Initiatives and Regulatory Environment The Indian government has implemented various initiatives to bolster domestic manufacturing and reduce reliance on imports. For instance, the Production-Linked Incentive (PLI) scheme was introduced to enhance local production capabilities. However, as of March 2025, the PLI scheme is set to lapse due to unmet production targets and delays in subsidy disbursements. Additionally, efforts are underway to streamline regulatory processes, such as simplifying export procedures and manufacturing licensing, to alleviate the workload on regulatory officials and expedite approvals. Future Growth Prospects Looking ahead, the Indian pharmaceutical industry is projected to experience substantial growth. Estimates suggest that the market could reach USD 120-130 billion by 2030 and expand further to USD 400-450 billion by 2047. This growth is anticipated to be driven by factors such as the rising prevalence of lifestyle-related diseases, an aging population, increased focus on holistic health, and the growing consumerization of healthcare. Furthermore, the industry is expected to invest approximately USD 10 billion annually in research and development by 2025, emphasizing new drug discovery and development. The biotechnology segment, in particular, is projected to grow at a compound annual growth rate (CAGR) of 15%, propelled by advancements in genetic engineering and personalized medicine.

Challenges and Opportunities

Despite the promising outlook, the industry faces challenges, including the need for enhanced regulatory compliance and quality standards. Addressing these issues is crucial for sustaining growth and maintaining global competitiveness. Opportunities lie in expanding into complex generics and biosimilars, with Indian companies poised to make significant progress in differentiated products such as peptides and inhalers in the U.S. market. In summary, India's pharmaceutical manufacturing industry is on a trajectory of significant expansion, underpinned by strategic initiatives, a strong domestic base, and a growing emphasis on innovation and quality compliance. Recent Developments in India's Pharmaceutical Industry India's drug regulator aims to implement various reforms, including streamlining export clearances for unapproved drugs and simplifying the manufacturing licensing process, in an effort to reduce the burden on its workforce, its head said on Thursday. The federal agency plans to streamline the export clearance process by considering an applicant's past export history, moving away from a quantity and customer-specific exports system. The simplified export norms, expected to be introduced in the next few weeks, would reduce the number of NOCs issued by the regulator by almost half, compared to the 10,000 issued in the last eight months, he said. The regulator will also remove certain licensing requirements for starting research and simplify manufacturing process for drugs used in testing, examination, and analysis in the country. Overview of the global pharmaceutical manufacturing industry In 2025, the global pharmaceutical manufacturing industry is experiencing significant growth, driven by technological advancements, increased healthcare demands, and a focus on personalized medicine. Artificial intelligence (AI) is playing a pivotal role, with projections indicating that by 2025, AI will contribute to 30% of new drug discoveries, thereby reducing costs and accelerating the development of personalized treatments. The industry is also witnessing substantial investments aimed at expanding manufacturing capacities and research capabilities. For instance, Johnson & Johnson has announced plans to invest over $55 billion in the United States over the next four years, including the construction of new manufacturing plants. Similarly, AstraZeneca is investing $2.5 billion in research and manufacturing in Beijing, focusing on early-stage research and clinical development supported by a new AI and data science laboratory. The industry is also witnessing substantial investments aimed at expanding manufacturing capacities and research capabilities. For instance, Johnson & Johnson has announced plans to invest over $55 billion in the United States over the next four years, including the construction of new manufacturing plants. Similarly, AstraZeneca is investing $2.5 billion in research and manufacturing in Beijing, focusing on early-stage research and clinical development supported by a new AI and data science laboratory. Furthermore, India's Contract Research, Development, and Manufacturing Organization (CRDMO) sector is expanding rapidly, with a 15% compound annual growth rate, outpacing global industry growth. This expansion is driven by India's cost competitiveness and accelerated project startup times. Global supply chain realignments are unlocking a $10 billion opportunity for Indian CRDMOs, as Western pharmaceutical companies seek alternative hubs. To capitalize on these opportunities, India is focusing on enhancing regulatory frameworks to streamline export processes and reduce bureaucratic workloads. The Drug Controller General of India (DCGI) plans to implement reforms that simplify manufacturing licensing and export clearances, thereby bolstering the efficiency of India's pharmaceutical exports. In summary, the global pharmaceutical manufacturing industry's growth in 2025 presents substantial opportunities for India. By leveraging its manufacturing strengths, investing in innovation, and refining regulatory processes, India is well-positioned to enhance its role as a pivotal player in the global pharmaceutical landscape.