Indian Pharmaceutical Industry Analysis: A Comprehensive Market Research Report | Scrolls
- Editor
- Oct 5
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by KarNivesh | 05 October, 2025
Overview of the Indian Pharmaceutical Industry
The Indian pharmaceutical industry has evolved into a global healthcare leader, currently valued at ₹5.12 lakh crore (USD 61.4 billion) in 2024 and projected to reach ₹14.55 lakh crore (USD 174.3 billion) by 2033, growing at a robust 11.32% CAGR. India contributes 20% of global generic drug exports and supplies medicines to over 200 countries, solidifying its position as the “Pharmacy of the World.”
Market Structure and Growth Drivers
Generics form 87% of India’s domestic market, driven by affordability and expertise in reverse engineering. The API (Active Pharmaceutical Ingredients) segment holds 8% of global market share and contributes 57% of WHO’s prequalified APIs. Meanwhile, biosimilars and biologics are emerging as high-growth areas, with opportunities worth over ₹7.56 lakh crore (USD 90 billion) as patents expire globally by 2030. The CDMO (Contract Development and Manufacturing Organization) market, valued at ₹1.01 lakh crore (USD 12 billion) in 2024, is expected to exceed ₹2.1 lakh crore (USD 25 billion) by 2030, driven by global supply chain diversification. India also produces 60% of the world’s vaccines, with over 10,500 manufacturing units across major hubs.
Key Players
Sun Pharma leads with a market capitalization of ₹3.79 lakh crore, followed by Divi’s Laboratories (₹1.62 lakh crore) and Cipla (₹1.27 lakh crore). Other notable companies include Dr. Reddy’s Laboratories, Torrent Pharma, and Mankind Pharma. Serum Institute of India, a private giant valued at ₹1.92 lakh crore, is the world’s leading vaccine producer.
Technological Transformation
The industry is undergoing rapid digitalization. Around 78% of firms have adopted digital marketing, while 65% use data analytics and 38% leverage AI and ML for research and clinical trials. Automation (42%) and IoT (28%) are improving manufacturing efficiency and compliance. AI applications are expected to reduce drug discovery time by up to 40% and costs by 20%.
Government Support
The Production Linked Incentive (PLI) scheme, with an outlay of ₹15,000 crore for pharmaceuticals and ₹6,940 crore for APIs, is boosting domestic manufacturing. Other initiatives like Bulk Drug Parks and Medical Device Parks aim to reduce import dependence. Regulatory reforms and 100% FDI under the automatic route have attracted ₹12,822 crore in 2023–24 alone.
Investment and Exports
India exported pharmaceuticals worth ₹2.11 lakh crore (USD 25.3 billion) in 2022–23, growing faster than domestic sales. M&A activity reached ₹19,205 crore (USD 2.3 billion) in Q3 2024, while private equity and venture capital investments exceeded ₹2.62 lakh crore (USD 30 billion) from 2022–24.
Challenges and Opportunities
Major challenges include dependence on China for 70% of API imports, regulatory compliance issues, and price erosion. Yet, opportunities abound in biosimilars (₹25,200 crore to ₹84,000 crore market potential by 2030), digital health, CDMO expansion, and R&D innovation.
Future Outlook
With favorable demographics, rising healthcare spending (projected to reach 2.5% of GDP by 2025), and government incentives, India’s pharma industry is poised to touch ₹37.57 lakh crore (USD 450 billion) by 2047. Transitioning from volume-based generics to value-driven innovation will define the next era of growth, ensuring India’s sustained global leadership in affordable healthcare solutions.
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