India’s domestic pharmaceutical market, estimated to be $41 billion in 2021, is likely to touch $130 billion by 2030, Economic Survey 2022-23, tabled in Parliament on Tuesday, showed.
Highlighting the role of Indian pharmaceuticals industry globally, the Survey showed the country was ranked third worldwide in terms of production of pharma products by volume and 14th by value. It was the largest provider of generic medicines globally, having a 20% share in global supply by volume, besides being a vaccine manufacturer with a market share of 60% globally.
Pharma exports from the country have been robust, sustaining positive growth despite the global trade disruptions and drop in demand for COVID-19-related treatments, according to the Survey. The exports clocked a healthy 24% growth in FY21, on the back of COVID-19-induced demand for critical drugs and other supplies made to over 150 countries. In FY22, pharma export were robust, sustaining growth despite global trade disruptions and drop in demand for COVID-19-related treatments.
Growth momentum
Carrying forward this growth momentum, drug and pharmaceutical exports during April-October 2022 were 22% higher compared with the corresponding pre-pandemic period in FY20, according to the Survey.
Cumulative FDI in the pharma sector crossed the $20 billion-mark by September 2022. Further, FDI inflows had increased fourfold over five years until September 2022, to $699 million, supported by investor-friendly policies and a positive outlook for the industry.
On its part, the government has undertaken several measures to improve the infrastructural facilities for the pharma sector. Strengthening the Pharmaceutical Industry (SPI) scheme was launched in March 2022 with ₹500 crore outlay for the period FY 21-22 to FY 25-26. The objectives of the programme are to strengthen the infrastructure facilities by providing financial assistance to pharma clusters to create common facilities; upgrade production facilities of MSMEs to meet national and international regulatory standards by providing interest subvention or capital subsidy on their capital loans; and promoting knowledge and awareness of the pharmaceutical and medical devices industry.
Three PLI schemes
The Survey also referred to the three production-linked incentive (PLI) schemes unveiled by the government focussed on pharmaceuticals; critical key starting materials/drug intermediaries/active pharmaceutical ingredients; and medical devices. The PLI schemes, for various industries, seek to unlock manufacturing capacity, boost exports, reduce import dependence and lead to job creation for both skilled and unskilled labour.
Striking a cautious note, the survey chapter on industries said “on the downside, exports are slowing down and are likely to moderate along with the probable global economic slowdown.
