Pharma has been a key driver in the Indian business growth among other industries. India has always been a major contributor to the world economy with its skilled workforce, knowledge of medicines, and low-cost manufacturing. The reports in 2021 state that the pharmaceutical industry in India is valued at $42 billion US dollars. India is one of the biggest exporters of generic and bulk medicines and accounts for 50% of the vaccine supplies across the ataşehir world.
So, how big is the pharma industry, and how India has achieved its growth in the past few decades? So, We will take a look at the history and some factual data to understand the growth drivers that helped India achieve the global pharmaceutical summit.
Indian pharmaceutical industry back then
The statistics of 2002 report that there were more than 20,000 registered drug manufacturers. So, The aggregated sales were worth $9 billion including formulations and generic bulk drugs. Of the formulations and bulk medicines, 85%, and 40%, respectively were sold in India. But, The remaining medicines were exported globally, and the major importers were Russia and the United States of America.
Now, you may ask how a developing nation like India was able to support developed nations in the medicinal background. There are four major reasons behind it and they are as follows:
- Economic drivers.
- Policy support from the Government.
- Increasing direct and indirect investments.
Cost efficiency of the drugs
The key driver of the pharmaceutical industries in India is the affordable workforce and skills. The low cost of production of medicines by a skilled workforce ensures competitive prices in the world economy and efficiency. The R&D growth inside India helped the country to develop and boost new formulations and medicines that come in less expensive than their global counterparts.
The effectiveness of the medicines helped Indian drugs penetrate the global market and retain their share. The export value increased to USD 5.8 billion in June 2021.
The increasing purchase power of the Indian per capita has also contributed to healthcare development. Increasing incentives on health insurance and Mediclaim facilities ensures additional push to the expenditure on medicines in India. So, This has increased the in-situ sales of medicines and pharmaceutical drugs within the country.
Policy support from the Government
The Government of India has always been looking forward to enhancing the living standards of its citizens. So, they have incentivized Mediclaim policies, health insurance, and term insurance plans that benefit the citizen on income tax returns. Apart from these, the government has announced an outlay of USD 26,580 million for pharmaceutical industries for the procurement of key ingredients, facility development, and active distribution channels.
Increasing direct and indirect investments
The FDI inflows have been increasing as per the reports of 2021. The estimate has reached USD 1.206 billion. Moreover, there are stocks and shares available for Indian consumers to invest in. There are mutual funds that use diversified portfolios. Many companies are listing on the exchange initializing the IPO escort processes.
So, these are the main drivers in accelerating the pharmaceutical industry in India. And there are other latent drivers like technology transfer, technology development, process controls, and process improvement contributing to the growth of the Indian pharma industry.