India’s ascension to become Pharmacy of the World

India today has attained the moniker of “Pharmacy of the World” and is indeed true with its radical innovation and ability to provide medicines and medical support to various nations across the globe, aided by its “Neighbourhood First Policy” and “Vaccine Maitri” initiative.

March 29, 2021

The Indian Pharmaceutical Sector is poised to grow to US$ 100bn by 2025.

Pharmaceuticals exports from India stood at US$ 16.3 bn in FY20, including bulk drugs, intermediates, etc.

Indian Vaccine market is estimated to grow from current USD 250mn to US$ 3.44bn by 2025.

Owing to the Vaccine Maitri initiative and Neighbourhood First Policy, India has supplied 150 nations with medicines.

Prime Minister Narendra Modi very appropriately gave India the moniker of ‘pharmacy of the world’, having supplied various countries with essential medicines and medical supplies during the COVID-19 pandemic. This is evident from the fact that Indian pharmaceutical companies have indigenously created medicines for the most needy countries. The current pandemic has been proof of the fact that India can not only innovate but also rapidly distribute time-critical drugs to every part of the globe where required. India being the world’s largest supplier of low-cost generics, vaccines, and affordable medicines, also produces the largest amount of drugs and has the second-largest number of Food and Drug Administration (FDA).. In a post pandemic world, India’s pharmaceuticals sector is poised to attain new heights. This case study aims to highlight the strengths of India’s pharmaceutical industry and the key government initiatives to boost investment in the sector.


Owing to a plethora of avenues and opportunities, the pharmaceutical sector plays a key role in India’s economic growth. India supplies affordable and low-cost drugs to the global populace and operates a number of United States Food and Drug Administration (USFDA) and World Health Organization (WHO) Good Manufacturing Practices (GMP)-compliant plants. Historically speaking, Indian pharmaceutical firms have been able to fulfil not only its domestic needs but has also acquired a leading position in the global pharmaceuticals market. In 1969, Indian pharmaceutical firms had only a 5 per cent share of the market in India, and global pharma at 95 per cent, whereas now the Indian pharma is at 85 per cent share whereas the percentage of global pharma in the Indian market now stands at a measly 15 per cent in 2020, thanks to several market segments like generics, vaccines, biologics, and others.

With benefits as a well-established domestic manufacturing base and low-cost skilled manpower, India is emerging as a global hub for pharmaceutical manufacturing. Now, even international pharmaceutical firms are eagerly looking at opportunities to capitalise the growing Indian pharma sector. With an aim of increasing industry revenue to $ 120bn-130bn by 2030 from current revenue of $ 41bn at a compound annual growth rate (CAGR) of 11-12 per cent, Indian pharmaceutical industry is poised to become the world’s largest supplier of drugs.

Current Market Size

By 2025 the Indian pharmaceutical sector is perfectly positioned to grow to US$ 100 billion. Pharmaceuticals export from India which stood at US$ 16.3 billion in FY20, includes bulk drugs, intermediates, drug formulations, biologicals, Ayush, and herbal products. India’s biotechnology industry comprising biopharmaceuticals, bio-services, bio-agriculture, bio-industry, and bioinformatics, was valued at US$ 64 billion in 2019 and is expected to reach US$ 150 billion by 2025.

With more than 262 India holds the highest number of US-FDA compliant pharma plants, outside the USA. This has played a key role in augmenting the share of pharmaceuticals exports in India’s total exports from 5.1 percent in April-October, 2019 to 7.3% in April-October 2020, making it the third largest exported commodity.

India is the only country with the largest number of US-FDA compliant pharma plants. This has played a key role in augmenting the share of pharmaceuticals exports in India’s total exports from 5.1 percent in April-October, 2019 to 7.3% in April-October 2020, making it the third largest exported commodity.

Drivers of Growth

Metro along with TIER I cities and rural markets have been significant drivers of growth in the Indian pharmaceutical industry, each accounting for about 30 per cent of the Indian pharmaceuticals market. This is driven by three factors- rapid urbanisation; medical infrastructure which will expand in terms of scale and scope; and compliance which has the potential to rise sharply driven by organised initiatives. Other factors like patented products, consumer healthcare, biologics, vaccines and public health, will indeed help the Indian pharma sector realise its full potential. The Biologics sector offers opportunities for immense growth. It has the potential to grow to US$ 3bn by 2020. Indian Vaccine market is estimated currently at US$ 250mn and is poised to grow to US$ 3.44bn by 2025.

COVID-19 Crisis: Impact and Response of India’s Pharma Industry

The COVID-19 pandemic has had a significant impact on nearly all segments of the Indian economy. Due to the pandemic induced lockdown, supply-chains, exchange and transfer of essential goods and services, movement of people and distribution of various commodities have all been negatively affected. India received requests for Hydroxychloroquine (HCQ), paracetamol, APIs and tablet supply from over 100 countries and supplied the same to many.

Covaxin and Covishield are the two vaccines manufactured in India and is being supplied to neighbouring countries and a host of other nations. Riding on the back of Vaccine Maitri and Neighbourhood First Policy, in response to the challenges brought by COVID-19, India has demonstrated global leadership, and has proved to be a reliable partner, providing nearly 150 nations with medicines. Vaccine Maitri began in the immediate neighbourhood, starting with Maldives, Bhutan, Bangladesh, Nepal, Sri Lanka, and Myanmar, as also Mauritius and Seychelles and thereafter to the Gulf.

India’s advantage lies in:

  • Fuelling pharmaceutical exports and strengthening the R&D ecosystem.
  • Investing in large-scale production of pharma products and expanding ancillary units.
  • Enhancing access to quality and affordable secondary/tertiary health services.
  • Strengthening India by providing technical knowledge and support to other developed and developing nations.
  • Significant availability of skill workforce and raw material.

Government Initiatives

Some of the initiatives taken by the Government to promote the pharmaceutical sector in India are as follows:

  • In September 2020, the government announced Production Linked Incentive (PLI) scheme for the pharmaceutical industry worth US$ 2.04 bn.
  • India plans to provide a US$ 1.3bn fund to support companies in manufacturing pharmaceutical ingredients domestically by 2023.
  • Under Budget 2020-21, US$ 9.30bn has been allocated to the Ministry of Health and Family Welfare is.
  • US$ 915.72mn has been allocated to health insurance scheme Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), with the objective to make affordable medicines available to common people, especially to poor and disadvantaged.
  • Ayushman Bharat, The National Health Protection Scheme is expected to benefit 100 million poor families in the country by providing fiscal support up to US$ 7,723.2 per family per year.
  • Government of India unveiled ‘Pharma Vision 2020’ to make India a global leader in end-to-end drug manufacture.
  • Government of India has offered US$ 942.8mn PLI between 5-20% for incremental sales and plans to set up three mega drug parks to drive sustainable cost competitiveness.

The Road Ahead

India’s pharmaceutical exports are sent to developed and developing countries like US, UK, South Africa, Russia, Nepal, Bangladesh etc. By expediting R&D, the Indian pharma companies can help usher in a new paradigm of drug manufacturing and testing. A lot will depend on the support from the state, funding availability, and collaboration between public and private research and funding institutions. Various measures like the Bulk Drug Park and Production Linked Schemes are being  undertaken under the aegis of ‘Make in India’ initiative for facilitating investment, fostering innovation, and thereby promoting robust business environment in the country.


This era of unique growth and innovation presents the most opportune time for India to emerge as the global ‘medical superpower’ by providing essential drugs, medical expertise, treatment infrastructure and capacity building to other nations with limited prospects.

India’s pharmaceuticals sector has grown in confidence and firmly moved on to an accelerated growth path. One can say with absolute confidence that further investments shall enable India’s “sunrise” pharma sector to belong to the global top strata.

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