India's pharmaceutical sector has rightfully earned the title 'pharmacy of the world', thanks to its extensive production of generic medications. The industry is now poised for a transformative leap - evolving into a global hub for innovative products and sustainable pharmaceutical manufacturing, as rightly said by Dr. Krishna Prasad Chigurupati, Chairman and MD, Granules India.
The fiscal year 2023-2024 saw the growth of pharmaceutical industries in India at an estimated USD 50-65 billion, with experts now anticipating a whopping USD 120-130 billion by 2030 and an ambitious target of USD 400-450 billion by 2047.1 India will now have to scale up its game to keep its title of 'Pharmacy of the World' as well as achieve the estimated growth. Let us further understand the present and future of pharma in India.
India is the largest exporter of generic medicines across the globe, but when it comes to value, the Indian pharmaceuticals rank 13th or 14th.1 Generic medicines are cost-effective, thereby pulling India back from going ahead on the ranking scale. High-value pharmaceuticals include biosimilars, complex generics, biologics and specialty drugs.1 The pharmaceutical industries in India need to focus on these categories of drugs to compete in the global pharma market.
The government of India has formed a strategic plan to achieve global recognition for high-value pharmaceuticals. India has devised the National Policy on Research & Development and Innovation in the Pharma-MedTech Sector and has launched a scheme for Promotion of Research & Innovation in the Pharma Sector (PRIP).1,2 This strategy has evoked a renewed sense of research and development, pushing pharma companies in India towards new drug discovery and helping them tackle resistance from other countries, particularly import tariffs recently introduced by the President of the United States of America.
The U.S. has introduced a 100% import duty on patented and branded drugs, greatly affecting the pharmaceutical industries in India. This trade policy, implemented under Section 232 of the Trade Expansion Act, targets branded pharmaceuticals while exempting companies building manufacturing facilities in America.1,2
The U.S. is the largest market for India for exporting its generic drugs. Approximately, 45-50% of generic drugs in the U.S. are supplied by Indian pharma companies, including Zydus Lifesciences, Dr. Reddy's Laboratories, Lupin, Aurobindo Pharma, and Sun Pharma, worth USD 9.8 billion and representing 40% of Indian exports2.
Under these stringent tariffs, it will be tough for Indian pharma companies to export generic drugs. On the other side, citizens of the U.S. face inflation risk, citing doubled prices for imported generic drugs and higher costs for medical care.2
But in a significant relief, the U.S., after much consideration, has withdrawn tariffs on imported generic drugs in early October 2025.3
Although the generic drug market is a protective shield for the Indian pharma companies, these export policies are indeed an opportunity and may significantly push them towards research and innovation of new drugs, as well as boost local manufacturing under the campaign, 'Atmanirbhar Bharat'.
The honorable Prime Minister of India, Shri Narendra Modi, has effected the campaign, 'Atmanirbhar Bharat'. Under this campaign, a ₹15,000 crore Production-Linked Incentive (PLI) Scheme for Pharmaceuticals was approved in the year 2021.2 This scheme focuses on three categories: biopharmaceuticals, complex generic drugs, and patented drugs nearing patent expiry, thereby reinforcing the need for innovating, manufacturing and the purchase of local products, reducing dependence on imported items.
India is dependent on other countries, with a major import of over 60% of Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs) from China. The PLI scheme is providing a significant boost to reduce the import of APIs and KSMs.1,2,4
Experts have also come up with a sustainable strategy to reduce this dependence on the U.S. and China through market diversification. This strategy involves exploring other countries and markets with appropriate pharmaceutical demands.
Growth in the Indian pharmaceutical industries has a direct impact on healthcare, economy, the IT sector and innovation through research and development.1,2,4
Although the pharmaceutical industries in India have built a secure base through the export of generic drugs, certain important challenges4 are experienced when it comes to competing with other countries in the manufacturing of high-value drugs and medical devices.
On this aspect, Medbound Times spoke to Mr. Mayuresh Raut, Assistant Professor at PCETs School of Pharmacy, Pimpri Chinchwad University, Pune, Maharashtra. He commented, "The industry must navigate critical challenges, including high reliance on raw material imports, competitive pricing pressure, and talent shortages, to realize its full potential."
1. Research and Development (R&D) investment: R&D are the need of the hour for the pharma companies in India. But the high cost and longer timelines in the discovery and development of a drug pull them back in the global high-value pharmaceutical market. There is also an acute shortage of skilled professionals in India, especially in specialized areas like advanced manufacturing, regulatory affairs, and R&D.
2. API and KSM dependence: India is heavily dependent on China for Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs). This dependence comes at the cost of R&D in the Indian pharmaceutical industries. Adding to the woes is the lack of adequate infrastructure and a disrupted and inefficient supply chain network.
3. Strict regulatory compliance and quality control measures: The U.S. FDA (Food and Drug Administration) and EMA (European Medicines Agency) impose rigorous regulatory and quality rules in the manufacturing and marketing of high-value drugs and devices. These include high-quality standards and changing norms that make it difficult for companies to adhere to in the long run.
4. Intellectual Property (IP) Issues: Generic and affordable versions of various drugs can be manufactured once the patent for the original drug expires. The pharma companies are therefore in constant battle for patents and intellectual property issues, making it difficult for domestic companies to produce high-demand drugs and devices.
Addressing the question raised earlier in this article, can India become a global medicine hub? Yes, India can definitely position itself as the leader of high-value drugs and medical devices. The only sustainable action plan being higher investments in research and development through the recruitment of skilled professionals, digital transformation and adoption of Artificial Intelligence and Machine Learning.
The strategic vision for the Indian pharmaceutical industry is to transition from a volume-based leader in generics to a global leader in value-driven innovation.
Mayuresh Raut, Assistant Professor, PCETs School of Pharmacy, Pimpri Chinchwad University, Pune
Pharmaceutical industries in India face certain challenges which can be turned around into opportunities. Experts have also stressed the need to shift from 'Make in India' to 'Discover in India'.1 India is working to enhance the future of pharma in India, but at the end, it needs to be research-forward to compete in the international pharmaceutical market.
What are high-value pharmaceuticals?
High-value pharmaceuticals include biosimilars, complex generics, biologics, and specialty drugs that have higher market value and innovation potential.
Why is India called the ‘Pharmacy of the World’?
Because India supplies nearly 50% of the global demand for generic medicines, making it a major player in affordable drug manufacturing.
How can India reduce dependence on China for APIs?
Through Production-Linked Incentive (PLI) schemes, domestic R&D investment, and diversifying trade partnerships with other nations.
DrugPatentWatch. “Indian Pharma: Some Challenges and Acceptances.” DrugPatentWatch Blog. Accessed November 3, 2025. https://www.drugpatentwatch.com/blog/indian-pharma-some-challenges-and-acceptances/
Vision IAS. “U.S. Tariffs to Hit Patented and Branded Drugs: Impact on Indian Pharmaceutical Exports.” Vision IAS Blog. Accessed November 3, 2025. https://visionias.in/blog/current-affairs/us-tariffs-to-hit-patented-and-branded-drugs-impact-on-indian-pharmaceutical-exports
The Times of India. “White House Shelves Tariffs on Generic Drugs, Sparing Bitter Pill for American Patients and Indian Pharma Companies.” October 2025. https://timesofindia.indiatimes.com/business/india-business/white-house-shelves-tariffs-on-generic-drugs-sparing-bitter-pill-for-american-patients-and-indian-pharma-companies/articleshow/124402619.cms
TaxTMI. “Analysis on India’s Pharmaceutical Sector.” TaxTMI Articles. Accessed November 3, 2025. https://www.taxtmi.com/article/detailed?id=13991'
Reviewed by Dr. Sumbul, MD Anatomy
Edited By M Subha Maheswari
