Growth of Pharma Exports from India

Why is India called the “pharmacy of the world”? It’s because wherever you go, the medicines sitting on the shelves probably have some connection to India. India meets more than 20% of the global demand for generic drugs, not to mention a huge share of vaccines and raw materials for medicines.

India’s pharma exports in FY24 so far have been remarkable, standing at USD 27.9 billion, with monthly exports consistently in the range of USD 2–3 billion. This extraordinary performance reaffirms India’s crucial role in global health care.

Pharmaceuticals and India have become synonymous as a quality, affordable supply source. But what’s driving this growth? And what makes India unique in a market as cut-throat as this? In this blog, we look deep into all that—how the pharma exports from India are important, the factors driving their growth, and what this means to you as an importer or exporter.

Ready to get started? First, let’s take a look at India’s big role in the global pharma industry.

Overview of Indian Pharmaceutical Exports

Experts predict that India's pharmaceutical sector could surpass $100 billion by 2025, driven by domestic manufacturing capabilities and growing international demand. With products exported to over 200 countries, India plays a vital role in global healthcare, meeting rising demand with affordable, high-quality medicines.

• Global Reach: India serves a wide range of markets—from the tightly regulated U.S. and Europe to developing regions like Africa and ASEAN. This broad appeal is powered by India’s expertise and ability to cater to diverse needs.
• Production Leadership: India ranks third globally in pharmaceutical production by volume and 14th by value. It delivers large quantities of medicines at competitive costs, ensuring consistent access to affordable, high-quality products for buyers worldwide.

This success didn’t happen by chance—let’s examine the key drivers that propel pharma exports from India.

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Key Drivers of Growth of Pharma Exports from India

India’s pharmaceutical export growth isn’t accidental. It’s the result of strategic efforts, strong fundamentals, and a mix of factors that make the country a global leader in the sector. Here’s a closer look at what’s driving this consistent rise.

1. Diverse Product Offerings: India caters to a wide spectrum of pharmaceutical needs. The country’s exports are not limited to one category but instead span across:
   
   • Generic medicines
   • Over-the-counter (OTC) drugs
   • Active Pharmaceutical Ingredients (APIs)
   • Vaccines and biosimilars
   • Custom Research Manufacturing (CRM)

This variety ensures that Indian exports remain relevant across diverse markets, from everyday healthcare needs to advanced medical solutions.

2. Affordable Generics:  Cost-effective and high-quality, India’s generic medicines help countries manage their healthcare budgets while maintaining quality care.
3. Efficient Production: Skilled workers, efficient processes, and readily available raw materials enable India to produce top-notch medicines at a lower cost.
4. Innovation and Technology: Automation, biotechnology, and cutting-edge R&D ensure quality and compliance with strict global standards.
5. Supportive Environment: Hubs like Hyderabad and Mumbai offer the infrastructure, talent, and innovation-friendly atmosphere needed for growth.
6. Proven Resilience: India’s ability to adapt during crises, including supply chain disruptions, has strengthened its reputation as a dependable supplier.

With these growth factors, India has secured a foothold in some of the world’s largest and most demanding markets.

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Major Export Markets For Pharma Exports

India’s pharmaceutical exports have a global footprint, catering to the healthcare needs of nearly every continent. Key markets drive this success, each with unique demands that Indian manufacturers are well-equipped to meet.

1. United States

The United States is India’s largest pharmaceutical export destination, accounting for nearly 30% of total exports. Indian manufacturers have built a strong presence in this highly regulated market by consistently meeting FDA quality and compliance standards. The U.S. relies heavily on India for generic drugs and specialized formulations, which play a key role in India’s export success.

2. United Kingdom

The United Kingdom is another significant market, with a strong demand for cost-effective generic medicines. India’s ability to provide affordable, high-quality drugs has positioned it as a preferred supplier. This partnership supports the UK’s efforts to manage healthcare costs without compromising quality.

3. South Africa

South Africa depends on Indian pharmaceutical exports to address its affordable medicine needs, particularly for vaccines and essential drugs. Indian manufacturers play a critical role in supporting South Africa’s healthcare infrastructure, helping to improve access to life-saving treatments.

Pharmaceutical exports are changing rapidly; here’s how recent trends are shaping the future.

Also Read: Guide To Importing And Exporting From USA For Indian Small Businesses

Recent Trends in Pharma Exports

India’s pharmaceutical industry isn’t just growing—it’s evolving in response to major global changes. These trends have shaped both the supply and demand sides of the market, opening new opportunities for exporters and importers. Let’s explore some key shifts:

1. Healthcare Transformations

Healthcare delivery has undergone significant changes:

• Telemedicine and Remote Healthcare: Once considered niche, these services have become mainstream, thanks to improved mobile and internet connectivity. Leading hospitals and private players offer virtual consultations and remote health monitoring as standard services.
• Increased Demand for Pharmaceuticals: As people become more aware of preventive healthcare and chronic disease management, the global demand for medicines, including generics and vaccines, continues to rise.

For exporters, these shifts mean higher demand for medicines and healthcare technologies that support these trends.

2. Consolidation in the Hospital Sector

Big hospital chains and multinational companies are increasingly acquiring smaller, independent private hospitals, especially in Tier-2 and Tier-3 cities. These smaller hospitals often struggle with challenges that make it difficult to stay competitive. 

Smaller hospitals also face stiff competition when it comes to attracting and retaining skilled medical staff, which adds to their operational difficulties. On top of that, smaller hospitals usually lack the bargaining power to negotiate better prices for medicines and equipment, further squeezing their margins. These factors make them more vulnerable and open to acquisition by larger players.

3. Increased Indigenisation of Manufacturing

India is actively boosting local production in the medical and pharmaceutical sectors:

• Government Initiatives: Programs like the Production Linked Incentive (PLI) scheme, Public Procurement Order (PPO), and the development of MedTech clusters aim to reduce dependency on imports for medical devices and components.
• Opportunities for Exporters: As domestic manufacturing strengthens, exporters can expect a rise in the availability of India-made APIs, medical devices, and diagnostic tools, enhancing the global competitiveness of Indian products.

4. Demand for Complex Generics

There’s a growing global preference for complex generics—medicines that require advanced manufacturing and strict regulatory compliance. Indian companies have invested in technology and R&D to cater to this niche, significantly boosting exports to developed markets like the U.S. and Europe. These products often involve challenging formulations or innovative delivery mechanisms, giving Indian manufacturers an edge in competitive markets.

5. Sustainability and ESG Compliance

Environmental sustainability is becoming a major focus for the pharmaceutical industry:

• Indian pharmaceutical companies are increasingly adopting eco-friendly practices to meet the global demand for responsible production.
• Adherence to Environmental, Social, and Governance (ESG) criteria has given Indian exporters preference in markets with stricter sustainability norms, including those in Europe and North America.

Efforts like reducing waste, optimizing energy use, and integrating sustainable practices into manufacturing processes are enhancing India’s reputation as a responsible exporter.

6. Technological Integration

Technology is reshaping the pharmaceutical manufacturing process:

• Automation: Automated production lines ensure consistency and reduce errors, particularly in high-volume production.
• AI in Quality Control: Artificial intelligence is used for real-time monitoring and analysis, helping meet stringent international standards.
• Advanced Analytics: Big data tools optimize processes and provide insights into supply chain efficiency, cost control, and market demands.

These technological advancements ensure that Indian manufacturers stay competitive while meeting the highest global standards in quality and efficiency.

7. Focus on Compliance and Quality Standards

The push for stricter regulations is driving standardization across the industry:

• Medical Devices: Starting in 2024, the Central Drugs Standard Control Organisation (CDSCO) is regulating Class C and D medical devices, ensuring uniform quality standards and protocols for testing and validation.
• Diagnostic Labs: Accreditation by NABL (National Accreditation Board for Testing and Calibration Laboratories) and QCI (Quality Council of India) is becoming the norm, setting higher benchmarks for diagnostic quality.

While trends shape demand, government initiatives play a pivotal role in enabling growth.

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Government Initiatives Supporting Pharma Exports

India’s pharmaceutical export growth is powered by well-designed government initiatives focusing on enhancing manufacturing, ensuring quality, and unlocking new market opportunities. Here’s how key programs contribute to this success:

1. Production Linked Incentive (PLI) Scheme

The PLI scheme incentivizes pharmaceutical manufacturers to increase domestic production and innovation. The scheme has boosted the output of critical APIs, drug intermediates, and formulations. Reducing reliance on imports for raw materials strengthens India’s position as a dependable global supplier.

2. Strengthening of Pharmaceutical Industry (SPI)

The SPI program targets small and medium enterprises (SMEs), helping them upgrade their infrastructure to meet international quality standards. It also provides financial assistance for building modern manufacturing facilities and encourages the adoption of advanced technologies, enabling SMEs to compete globally.

3. Pharmaceutical Promotion and Development Scheme (PPDS)

PPDS focuses on promoting Indian pharmaceutical products in international markets. It supports exporters by facilitating participation in trade fairs, exhibitions, and buyer-seller meetings. The scheme also enhances market access and branding while funding studies to identify emerging export opportunities.

4. Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)

PTUAS is aimed at modernizing pharmaceutical manufacturing. By offering financial support for adopting advanced technologies, automation, and digitization, the program ensures that Indian manufacturers maintain compliance with stringent global quality standards.

5. Public Procurement Order (PPO)

The PPO mandates government organizations to prioritize locally manufactured pharmaceutical and medical products in procurement processes. This initiative supports domestic production while reducing import dependency, giving Indian manufacturers a competitive edge.

6. MedTech Clusters and Infrastructure Development

The establishment of MedTech clusters provides state-of-the-art facilities for manufacturing medical devices and pharmaceuticals. These clusters foster collaboration among manufacturers, research organizations, and academic institutions, strengthening India’s manufacturing ecosystem.

7. Government e-Marketplace (GeM)

The GeM portal offers a transparent platform for local manufacturers to participate in government procurement. It streamlines the buying process, ensuring fair competition and better market access for Indian pharmaceutical exporters.

8. Pharmexcil Support

The Pharmaceuticals Export Promotion Council of India (Pharmexcil) is crucial for boosting exports. It organizes international trade delegations, provides guidance on regulatory compliance, and acts as a bridge between the government and exporters to address trade-related challenges.

With these robust policies in place, what does the future hold for Indian pharmaceutical exports? Let’s take a look.

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The Future of Pharma Exports from India

India’s pharmaceutical exports are set for strong growth, fueled by innovation, quality, and strategic expansion into new markets. As global healthcare needs evolve, India remains well-positioned to address these demands efficiently.

1. Projected Growth

India’s dominance in the generics sector ensures a steady rise in exports as global demand for affordable medicines increases. Emerging markets in Africa, ASEAN, and Latin America are also expanding their healthcare investments, creating fresh opportunities for Indian exporters.

2. Focus on R&D

Indian companies are putting more money into research and development, focusing on creating advanced medicines:

• Biosimilars and complex generics are gaining traction in developed markets.
• Precision medicine and personalized treatments for chronic and rare diseases are becoming significant growth drivers.

3. Commitment to Quality

With stricter global regulations, Indian manufacturers are committed to maintaining high standards:

• Companies are continuously upgrading facilities and production processes to meet stringent international benchmarks.
• Initiatives like NABL-accredited diagnostic labs and stricter CDSCO regulations for medical devices strengthen global trust in Indian exports.

4. Expansion into Emerging Markets

While India has established itself in developed markets like the U.S. and EU, its focus on emerging regions is increasing:

• African and Southeast Asian nations are investing more in healthcare, and India’s affordable medicines are well-suited to their needs.
• Collaboration with organizations like WHO ensures wider adoption of Indian vaccines and essential medicines.

5. Technology and Sustainability

Indian pharmaceutical companies are utilizing digital tools and prioritizing sustainability:

• AI and data analytics are enhancing production efficiency and supply chain management.
• Sustainable practices aligned with ESG standards are helping Indian exporters gain preference in markets with stricter compliance norms.

For exporters to thrive in this growing market, operational efficiency is key. Pazago offers just that.

Also Read: Understanding a Digital Supply Chain Platform

Enhancing Trade Efficiency with Pazago

Managing pharmaceutical exports involves its fair share of complexities—handling documentation, tracking shipments, maintaining compliance, and ensuring seamless collaboration among stakeholders. Pazago simplifies every step, ensuring smooth and efficient operations. Here’s how it helps:

• Centralized Management: Consolidate purchase orders and streamline workflows to eliminate paperwork.
• Real-Time Tracking: Monitor shipments across 180+ carriers in 110+ countries on one platform.
• Financial Tools: Simplify FX risk, payments, and financing for better cost control.
• Quality Inspections: Access detailed reports after inspections to ensure product standards.
• Insurance Integration: Manage shipment insurance directly on the platform to save time.
• Seamless Collaboration: Align all stakeholders through a centralized communication hub.

Conclusion

The pharma exports from India continue to grow rapidly, supported by cutting-edge innovation, world-class manufacturing standards, and a steadily increasing demand across international markets. 

In this competitive landscape, exporters face the challenge of meeting stringent quality regulations, managing complex supply chains, and adapting quickly to shifting market conditions. Staying efficient and competitive isn’t just an advantage; it’s a necessity for long-term success.
That’s where Pazago comes in. Pazago makes trade operations easier by organizing workflows, automating documentation, and enabling seamless collaboration. This saves time and reduces risks, keeping your processes efficient and hassle-free.

Ready to take your pharma exports to the next level? Start with Pazago today!