The USD 41 billion Indian pharma industry, the world’s third largest by volume and 13th largest by value, stands to grow by between 12 and 14 percent in the next three years, with exports predicted to grow by eight to 14 percent, according to a recent KPMG report.
The report identifies the fact that India is undergoing an epidemiological transition from communicable to noncommunicable diseases as a key driver of this growth. Public healthcare spending is also on the rise with the rollout of schemes like Ayushman Bharat to cover the economically weaker sections of the Indian population and plans are afoot to increase public health spending to 2.5 percent of GDP by 2025. Moreover, Indians are increasingly health-savvy and aware of different treatment options and modern medicines, further contributing to the domestic industry’s growth.
However, India does not only represent a burgeoning domestic pharma market, but also a key component of the global supply chain. Indian manufacturers account for 50 percent of a range of vaccines globally, 40 percent of generics in the US, and 25 percent of demand in the UK.
This strong base is being augmented by a governmental push, including the recent announcement of a USD 1.3 billion fund, to further encourage the domestic manufacture of pharmaceutical ingredients. The COVID-19 pandemic has brought home the vital importance of securing key elements of the pharmaceutical value chain and ensuring multiple sourcing close to consumers, especially for India, where 70 percent of active pharmaceutical ingredients (APIs) and 60 percent of penicillin are imported from other countries in Asia.
The KMPG report added that new safeguards on manufacturing and product standards are helping to provide reassurance to customers at home and abroad as India seeks to shed its reputation as a purely low-cost manufacturing location and increase confidence in product quality.