The India Active Pharmaceutical Ingredients Market, estimated at USD 14.81 Bn in 2025, is expected to exhibit a CAGR of 7.9% and reach USD 25.23 Bn by 2032.
The market growth is driven by increasing demand for innovative and effective drugs across diverse therapeutic areas. Advances in drug discovery, biopharmaceuticals, and digital technologies are improving treatment outcomes and operational efficiency. Supportive regulations, rising R&D investments, and a strong focus on patient-centric care are creating new opportunities for pharmaceutical companies.
Market Dynamics:
India active pharmaceutical ingredients market growth is driven by two major factors - increasing domestic production and significant export opportunities. Growing generics market in India has prompted local pharmaceutical companies to focus on in-house API manufacturing to reduce costs and improve margins. Several Indian pharmaceutical firms are enhancing API production capacity through expansions and technology upgrades. India's strong capabilities in API production has enabled it to capture a sizeable share in the global export market. With large overseas clientele and favorable regulations, API exports from India are likely to increase significantly in the near future. However, compliance with global quality standards and increasing environmental regulations can pose challenges for exporters.
Growing Generic Drug Industry Can Drive Market Growth
Growing generic drug industry in India can drive the market growth. India is considered as the largest provider of generic medicines globally with the generic drugs accounting for 20% of global exports in terms of volume. The cost-effective production of APIs in India enables domestic pharmaceutical companies to produce generic drugs at competitive prices and export them to regulated markets. Rising demand for low-cost generic drugs can boost demand for APIs from domestic manufacturers.
Increasing Domestic Pharmaceutical Production Can Boost Demand for API
Along with growing generic drugs exports, increasing domestic production of pharmaceutical formulations can also boost demand for APIs in India. India's domestic pharmaceutical market size has exhibited a CAGR of over 11% during the last 5 years and is expected to reach USD 55 billion by 2025. Rising domestic demand for drugs can propel API manufacturers to increase their capacities. Moreover, government's initiatives like 'Make in India' and production-linked incentive schemes are encouraging local manufacturing that can boost demand for API intermediates and active ingredients in the coming years.
Environment and Regulatory Compliance Related Issues Can Hamper Market Growth
India active pharmaceutical ingredients market growth can be hampered by environmental and regulatory compliances. Stringent environmental norms regarding effluent treatment and hazardous waste disposal can increase costs of operations for API manufacturers. Obtaining various regulatory approvals also involves high costs and long timelines in India. Meeting the compliance standards of international markets like the U.S. and Europe with respect to environment, health and safety issues can poses challenges. Dependency on China Raises Supply Chain Risks
India's dependency on China for certain bulk drug imports can hamper the market growth. It is estimated that nearly 70% of the total bulk drugs and intermediates requirement of Indian pharmaceutical sector is met through imports, primarily from China. Any supply chain disruption in China can severely impact domestic manufacturing. API prices from China are highly volatile due to factors like capacity adjustments and environmental regulations in that country. This leads to uncertainties in costing and timely availability of materials for Indian drug makers.
Diversification into Complex Molecules Boosts Opportunities
Indian API producers are finding opportunities in diversifying in manufacturing of complex APIs, specialty drugs and active pharmaceutical ingredients of NCEs. Given the strengths of process synthesis and process R&D, Indian companies can leverage capabilities to produce complex molecules that were traditionally imported. Large investments by major domestic firms into advancement of technologies for complex API synthesis are expected to boost local manufacturing in the long-run.
Collaborations with International Drug Makers Can Drive Market Growth
Engaging in contract manufacturing and export partnerships with global innovator pharmaceutical companies can offer attractive opportunities for Indian API manufacturers. Leading Indian players are collaborating with international drug makers to undertake active drug substance production for their patented compounds. Such long-term deals not only open up new high-growth market avenues but also aid companies to adopt best practices. As Indian companies establish reliability and quality credentials, many more such partnerships can boost API exports.
Link: https://www.coherentmarketinsights.com/market-insight/india-active-pharmaceutical-ingredients-market-4785
Key Development
- In February 2023, Aurobindo Pharma Limited, a pharmaceutical company, announced that its step-down subsidiary, AurolifePharma LLC, had received final approval from the U.S. Food & Drug Administration (USFDA) to manufacture and market Diclofenac Sodium Topical Solution USP, 2% w/w.
- In July 2022, Piramal Pharma Limited’s Pharma Solutions division, a top contract development and manufacturing organization (CDMO), opened a new active pharmaceutical ingredient (API) plant at its Aurora, Ontario, Canada
- In March 2022, India initiated domestic production of 35 active pharmaceutical ingredients, which had previously been 90% dependent on imports from China, as part of the production-linked incentives (PLI) scheme
Key Players: Dr. Reddy's Laboratories, Aurobindo Pharma, Lupin, Cipla, Sun Pharmaceutical Industries, Cadila Healthcare, Hetero Drugs, Divis Laboratories, Jubilant Pharmova, Granules India, Laurus Labs, Aarti Drugs, Alembic Pharmaceuticals, Alkem Laboratories, Biocon, Glenmark Pharmaceuticals, Ipca Laboratories, and Unichem Laboratories
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