India’s recent trade agreements with Europe and New Zealand, combined with strong government interventions and industry-focused reforms, are expected to accelerate the pharmaceutical sector’s growth trajectory. With domestic demand rising and exports expanding, India’s pharmaceutical market—currently valued at around USD 60 billion—is projected to reach USD 130 billion by 2030.
The Indian pharmaceutical industry today ranks third globally by volume and eleventh by value, supported by more than 3,000 pharmaceutical companies and approximately 10,500 manufacturing facilities. Over the years, India has earned global recognition as the “Pharmacy of the World,” built on a powerful combination of affordability, quality, and large-scale manufacturing capability.
India remains the world’s largest supplier of generic medicines, accounting for nearly 20 per cent of global generic supply and producing around 60,000 generic brands across 60 therapeutic categories. Beyond formulations, India has developed a strong Active Pharmaceutical Ingredient (API) ecosystem, with nearly 500 API manufacturers contributing around 8 per cent of the global API market.
As India sets its sights on becoming a USD 130 billion pharmaceutical market by 2030, a combination of exports, investment, policy support, infrastructure development and innovation-led initiatives is expected to shape the next phase of growth.
Key Growth Drivers
1. Rising Export Momentum
India’s pharmaceutical sector has steadily strengthened its global footprint through expanding exports and diversified market outreach.
Government data indicates strong export momentum, with drugs and pharmaceutical exports increasing from approximately USD 2.59 billion in January 2025 to USD 2.66 billion in January 2026—an increase of about 2.7 per cent. Medical devices have also emerged as a major growth area, with exports increasing significantly from USD 2.5 billion in FY2020–21 to USD 4.1 billion in FY2024–25, with Indian products reaching 187 countries.
Importantly, Indian pharmaceutical companies are increasingly diversifying their export destinations beyond traditional markets. Shipments have expanded into emerging and non-traditional markets such as Nigeria, Mexico, Tanzania, Brazil, Sri Lanka, Saudi Arabia, Spain, France and the Netherlands.
This diversification strategy has strengthened export resilience by reducing exposure to tariff-related risks concentrated in individual markets.
2. Strong Foreign Investment Interest
The pharmaceutical industry is ranked among the top 10 industries attracting foreign investment in India. For the financial year 2025–26 (up to September), foreign investment inflows into the drugs and pharmaceuticals sector reached Rs 13,193 crore.
3. Expanding Trade Agreements
India’s expanding network of international trade agreements is expected to unlock fresh opportunities for pharmaceuticals and medical devices.
Recent agreements and negotiations—including the India–EU Free Trade Agreement, the India–UK Comprehensive Economic and Trade Agreement (CETA) and the India–New Zealand Free Trade Agreement — are expected to improve market access, stimulate investment, lower trade barriers and further integrate India into global healthcare value chains.
These agreements could significantly benefit pharmaceutical exporters by opening up new markets and improving competitiveness.
4. Government-led Interventions Driving Structural Change
Government policy support remains one of the strongest pillars behind the sector’s growth story. The sector is backed by several initiatives aimed at boosting domestic manufacturing, reducing import dependence, strengthening infrastructure, encouraging research and innovation and enhancing global competitiveness.
Schemes supporting the pharmaceuticals sector include:
- Production Linked Incentive (PLI) Schemes
- Schemes for Infrastructure Development for Bulk Drug and Medical Devices
- Scheme for Promotion of Research and Innovation in Pharma MedTech (PRIP)
- Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP)
Together, these measures are helping transform India from a volume-driven manufacturer into an innovation-oriented pharmaceutical ecosystem.
5. Biopharma SHAKTI
Looking beyond generics, the government’s proposed Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation) initiative represents a major push to build a strong ecosystem for the domestic production of biologics and biosimilars.
Announced in Union Budget 2026–27 with an allocation of Rs 10,000 crore over five years, the programme aims to position India as a global biopharmaceutical manufacturing hub.
The initiative includes the establishment of three new National Institutes of Pharmaceutical Education and Research (NIPERs), the upgradation of seven existing institutes and the development of over 1,000 accredited clinical trial sites nationwide.
The programme is expected to strengthen clinical research capacity and support innovation in high-value biopharmaceutical therapies.
Looking Ahead
India’s pharmaceutical sector is entering a transformative phase. Growth is no longer being driven solely by cost competitiveness and generic manufacturing. Increasing exports, infrastructure development, targeted policy interventions, innovation incentives and next-generation biopharmaceutical investments are collectively reshaping the industry.
If effectively implemented and sustained, these initiatives could help India not only achieve its USD 130 billion target by 2030 but also strengthen its position as a global healthcare and pharmaceutical powerhouse.
