India Pharmaceutical Market Outlook to 2030

India Pharmaceutical Market Overview

• The India pharmaceutical market is valued at USD 65 billion, based on a comprehensive historical analysis. It is driven by a range of factors, including a rising population and an increasing incidence of chronic diseases such as diabetes and cardiovascular ailments. A growing emphasis on generic drugs also plays a pivotal role, along with government initiatives.

• The market in India is primarily dominated by key cities like Mumbai, Hyderabad, and Bengaluru, which serve as hubs for pharmaceutical manufacturing and R&D. Mumbai, being home to many major pharmaceutical companies, enjoys a strong infrastructure and access to international markets. Hyderabad, known as the Pharma City of India, dominates due to its well-established ecosystem of drug manufacturing facilities.
• The Ayushman Bharat Pradhan Mantri-Jan Arogya Yojana (AB-PMJAY), launched in 2018, provides cashless coverage of up to INR 500,000 per family for secondary and tertiary care, aiming to cover 500 million low-income Indians. By 2023, the program facilitated over 22.7 million hospital admissions and saved families more than INR 250 billion in treatment costs.

India Pharmaceutical Market Segmentation

• By Drug Type: The market is segmented by drug type into generic drugs, branded drugs, OTC medicines, and biopharmaceuticals. Generic drugs hold the dominant market share due to the Indian government's policies promoting affordable healthcare, the expiration of major drug patents, and India's reputation as the world's largest supplier of generic medicines.

• By Therapeutic Area: The market is segmented by therapeutic area into cardiovascular drugs, anti-infectives, oncology drugs, respiratory drugs, and diabetes drugs. Cardiovascular drugs dominate the market share, driven by the rising prevalence of heart diseases and hypertension in India. The increasing elderly population and lifestyle changes contribute to the growing demand for cardiovascular treatments.

India Pharmaceutical Market Competitive Landscape

The market is dominated by both domestic and multinational companies, with a few major players holding substantial influence over the industry. The competitive landscape reflects the consolidation of resources and innovations by these key players, positioning them as market leaders.

India Pharmaceutical Market Analysis

Market Growth Drivers

• Increasing Health Expenditure: Indias total health expenditure is rising, driven by both private and public sector investments. The rise in healthcare spending correlates with an increasing demand for pharmaceutical products, particularly in the urban middle class and rural populations covered by government healthcare initiatives. Government programs such as Ayushman Bharat are driving up health expenditure, further boosting the consumption of essential medicines and generic drugs.
• Growing Aging Population: India is experiencing a sharp increase in its aging population, which in turn is leading to a higher demand for pharmaceutical products, especially chronic disease medications. According to the Ministry of Health and Family Welfare, the number of people aged 60 and above is projected to reach 200 million by 2025, increasing the consumption of drugs related to cardiovascular diseases, diabetes, and neurological disorders.
• Boost in Medical Tourism: India is becoming a global hub for medical tourism, particularly in pharmaceutical-driven treatments like organ transplants, cancer treatments, and fertility therapies. Indian pharmaceutical companies provide cost-effective, high-quality drugs that make medical treatments affordable for international patients. Medical tourism is expected to rise by 20% annually, with an increasing number of foreign nationals seeking treatments in India.

Market Restraints

• Compliance with International Standards: Indian pharmaceutical companies face challenges in meeting international regulatory standards, particularly for exports to the US and EU markets. In 2023, several Indian pharmaceutical firms faced restrictions due to non-compliance with Good Manufacturing Practices (GMP) as enforced by the USFDA. Meeting these stringent standards requires major investment in quality control and manufacturing infrastructure, raising operational costs and leading to delays in export shipments.
• Supply Chain Disruptions: The Indian pharmaceutical sector relies heavily on imports of Active Pharmaceutical Ingredients (APIs) from countries like China. In 2022, disruptions in API supply chains due to the global pandemic and geopolitical tensions caused a 15% shortage in drug production across several categories, including antibiotics and cardiovascular medicines.

India Pharmaceutical Market Future Outlook

Over the next five years, the India pharmaceutical market is expected to witness growth, driven by several factors. The continued expansion of healthcare infrastructure, government initiatives like Ayushman Bharat, and the increasing prevalence of lifestyle diseases will be the primary growth drivers.

Future Market Opportunities

• Expansion of Biopharmaceuticals: Indias biopharmaceutical sector is set to grow rapidly, with major investments in biologics, biosimilars, and vaccines. The governments continued support for R&D, combined with the establishment of biopharma clusters, will enable Indian companies to compete globally in the biopharmaceutical space.
• Increased Adoption of Artificial Intelligence: The Indian pharmaceutical industry will increasingly adopt artificial intelligence (AI) for drug discovery, clinical trials, and supply chain management. By 2028, over 50% of pharmaceutical companies in India are expected to use AI-based platforms to improve drug development processes and optimize manufacturing efficiency. AI adoption will help reduce costs, enhance precision in clinical trials, and speed up the introduction of new drugs to the market.