India’s pharmaceutical sector is witnessing significant expansion, with the active pharmaceutical ingredient (API) market projected to reach $22 billion by 2030. According to a report by management consulting firm Praxis Global Alliance, the Indian API industry is growing at a compound annual growth rate (CAGR) of 8.3%. This growth underscores India’s increasing role as a global pharmaceutical powerhouse and a critical supplier of essential drug components.
India’s Rise as a Leading API Producer
APIs are biologically active components in medicines responsible for their therapeutic effects. India has emerged as the third-largest API producer globally, commanding an 8% market share. The country manufactures over 500 different types of APIs, reinforcing its status as a key player in the global pharmaceutical supply chain.
A Major Contributor to Global Healthcare
India plays a vital role in global healthcare, contributing 57% of the APIs listed in the World Health Organization’s (WHO) prequalified list. This highlights the country’s commitment to maintaining high-quality pharmaceutical standards and ensuring the availability of essential medicines worldwide. The API market is expected to grow from $18 billion in 2024 to $22 billion by 2030, demonstrating strong and sustained growth in the sector.
API Market’s Impact on India’s Pharmaceutical Industry
APIs represent a significant portion of India’s pharmaceutical market, accounting for approximately 35% of the sector’s total value. On average, APIs contribute around 40% to the cost of drug manufacturing. However, market fluctuations can push this cost up to 70-80%, influencing the pricing and availability of medications.
Government Initiatives Driving Growth
The Indian government has introduced several initiatives to support and expand the pharmaceutical industry, particularly API production. These include:
- Production Linked Incentive (PLI) Scheme (2020-2030) – Encourages domestic API production by providing financial incentives.
- Promotion of Bulk Drug Parks Scheme (2020-2025) – Aims to establish large-scale API manufacturing clusters to enhance competitiveness.
- PLI Scheme for Pharmaceuticals (2020-2029) – Focuses on strengthening India’s pharmaceutical sector by supporting innovation and efficiency.
India’s API market is on an impressive growth trajectory, reinforcing the country’s position as a global pharmaceutical leader. With strong government support, increasing global demand, and sustained investment in API production, India is well-positioned to expand its influence in the pharmaceutical sector. As the country continues to innovate and scale its production capabilities, its role in the global healthcare ecosystem will become even more significant in the coming years.
(With inputs from agencies)
