India's pharmaceutical industry
India plays an important role in the global pharmaceuticals and vaccine industry. It is the largest provider of generic medicines globally. The country has a share of 20% in the global supply volume and contributes to around 60% of the global vaccines. India ranks third in the world in terms of volume and is the fourteenth largest in terms of value. Key segments of the Indian pharmaceutical industry are OTC medicines, Generics, APIs, Vaccines, Biosimilars, and Custom Research Manufacturing (CRM).
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India is the world leader in supplying vaccines like DPT, BCG, and Measles. It also has the highest number of US FDA-approved plants outside of USA. The key USP of the Indian Pharmaceutical Industry is affordable price and high quality and because of this, India is also sometimes called the “Pharmacy of the World”. The total annual turnover of the industry was US$ 41.68 billion in 2021-22. One of the major achievements of the Indian Pharma Industry is access to affordable HIV drugs. Additionally, India is one of the largest suppliers of low-cost vaccines to the world.
India majorly exports drug formulations & biologicals, and these products contribute to about 75% of the total pharmaceuticals exports out of India.
Export Trend
India’s share of pharmaceuticals and drugs in the global market is 5.92%. Formulations and Biologics constituted the major portion of India’s exports with a share of 73.31% followed by drug intermediates and bulk drugs. During April 2022-February 2023, the exports of drugs and pharmaceuticals stood at US$ 22.9 billion. During 2021-22, the country exported pharma products worth US$ 24.62 billion, while in 2020-21, the exports grew at 18% YoY to US$ 24.4 billion. This robust performance was achieved despite the global supply chain disruptions, lockdowns, and subdued manufacturing.
In February 2023, India exported US$ 2.05 billion worth of drugs and pharmaceuticals, a 4.72% increase from US$ 1.96 billion in February 2022. USA, UK, South Africa, Russia, and Nigeria are India’s top five export destinations. India played a key role during the Covid-19 pandemic and demonstrated its ability to be a consistent and reliable pharma supplier to the world even during time of crisis.
India has the highest number of United States Food and Drug Administration (USFDA) compliant companies with plants outside of USA. About eight out of 20 global generic companies are from India and over 55% of the exports from the country are to the highly regulated markets. As the country is the biggest vaccine exporter, about 65-70% of the World Health Organization (WHO) vaccine requirements are sourced from India. From April 2022-September 2022, exports of Drugs & Pharmaceuticals stood at US$ 12.72 billion and exports of Medicinal and Pharmaceutical products stood at US$ 4,066.86 million.
Export Destinations
India exports pharmaceutical products to North America, Africa, the EU, ASEAN, Latin America & Caribbean (LAC), Middle East, Asia, CIS, and other European regions. Nearly two-thirds of India’s exports goes to NAFTA, Europe, and Africa. The top five export destinations for Indian Pharma Industry in 2021-22 were the US, UK, South Africa, Russia, and Nigeria.
The US, UK, and Russia are among the largest importers from India at a share of 29%, 3%, and 2.4%, respectively during 2021-22. India’s exports of pharma products to these countries in FY22 were: USA with US$ 7.10 billion, the UK with US$ 704.5 million, South Africa with US$ 612.3 million, Russia with US$ 597.8 million, and Nigeria with US$ 588.6 million. India’s pharma exports to USA in value grew at a CAGR of 6.9% over last three years. Additionally, for UK and Russia, it grew at a CAGR of 3.8%, and 7.2%, respectively over the same period.
As of August 2021, the number of USFDA approved facilities stood at 741. Additionally, the number of ANDAs won by the Indian firms till December 2020 stood at 4,346. USFDA inspections were not conducted during the last couple of years due to the Covid pandemic, however, the inspections have started happening now and are expected to further increase Indian exports to USA.