India Active Pharmaceutical Ingredients (API) Market

The India Active Pharmaceutical Ingredients (API) Market is valued at USD 13.03 Billion in 2023 and is projected to reach a value of USD 37.11 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 12.33 % between 2024 and 2032.

Industry Overview

• The increasing activities of companies in developing branded drugs are boosting the demand for active pharmaceutical ingredients in India
• The oncology segment in India's API industry is projected to grow significantly due to the increasing number of cancer cases.
• In FY24 (April-January), India’s pharmaceutical exports hit USD 22.51 billion, marking an 8.12% year-on-year growth. January 2024 alone saw exports worth USD 2.13 billion, 5.8% of total exports for the month.

Government Initiatives

• India's efforts to bolster its potential in Active Pharmaceutical Ingredients yield significant results. In 2020, the government's approval of a substantial budget of INR 6,940 crore for a production-linked incentive (PLI) scheme marked a turning point. This initiative, designed to stimulate domestic manufacturing of Key Starting Materials (KSMs), Drug Intermediaries (DIs) has already produced 35 crucial API's. These API's, which previously accounted for about 67% of India's heavy import dependence, are now being manufactured domestically, showcasing the scheme's effectiveness.
• The Department of Pharmaceuticals has granted "in-principle" approval to proposals from Himachal Pradesh, Gujarat, and Andhra Pradesh under the "Promotion of Bulk Drug Parks" scheme. With a budget of INR 3,000 crore, this scheme provides financial aid to these states to create bulk drug parks, reducing manufacturing costs and enhancing competitiveness through world-class infrastructure.
• The Government of Assam also proposed a Pharmaceutical Park in Chaygaon, Kamrup Rural, estimated to cost INR 153.64 crores and span 100 acres. To foster innovation, the government has allowed up to 100% foreign direct investment (FDI) through the automatic route for Greenfield pharmaceutical projects and implemented new intellectual property rights protection strategies.
• For FY25, the government has allocated INR 1,000 crore to promote bulk drug parks, significantly increasing the previous year's budget. The overall budget for the pharmaceutical industry development was increased to INR 1,300 crore, with INR 150 crore earmarked for medical device park promotion and INR 40 crore for assistance to medical device clusters.
• The Jan Aushadhi scheme's budget was raised to INR 284.5 crore for FY25, aiming to provide affordable generic medicines. A mission to eliminate sickle cell anemia by 2047 includes awareness, screening, and counseling efforts.
• The government encourages businesses to invest in R&D in priority fields to support pharmaceutical research and innovation and has established 157 nursing colleges. The "Strengthening of Pharmaceutical Industry (SPI)" scheme, with a budget of INR 500 crore, aims to improve productivity and sustainability in pharma clusters and MSMEs. The government plans to expand the Pradhan Mantri Bhartiya Jan Aushadhi Kendras to 10,500 by March 2025, offering a wide range of drugs and surgical instruments.
• The National Medical Devices Policy, 2023, was approved to support the growth of the medical device sector. The PLI scheme for pharmaceuticals, with a total outlay of INR 15,000 crore from 2020-21 to 2032-29, aims to enhance India's manufacturing capacity and diversify its product offerings.

Key Projects Overview

India has launched around 21 projects to produce key active pharmaceutical ingredients under the production-linked incentive (PLI) scheme, with a combined installed capacity of 33,895 tonnes. These projects focus on essential bulk drugs such as Para Amino Phenol (for paracetamol), Atorvastatin (for cholesterol), antibiotics like Sulfadiazine and Levofloxacin, and antivirals like Lopinavir. Notable companies include Meghmani and Sadhana Nitro Chem, with capacities of 13,500 and 12,000 tonnes for Para Amino Phenol, respectively. Hetero is producing four different APIs, and Hindy's Lab has a 3,000-tonne capacity for 1,1 Cyclohexane Diacetic Acid (an intermediate for gabapentin). Despite this growth, Indian API costs remain 20-25% higher than Chinese imports, affecting price competitiveness.

Export Outlook

India is a leading player in the global API market, producing over 500 different APIs and holding an 8% share of the global industry and contributes 57% to the WHO's prequalified list. The pharmaceutical sector is a top destination for foreign investment, with exports reaching over 200 countries, including regulated markets like the USA, West Europe, Japan, and Australia. Notably, India supplied around 45 tonnes and 400 million tablets of hydroxychloroquine to 114 countries.

In FY24 (April-January), India’s pharmaceutical exports hit USD 22.51 billion, marking an 8.12% year-on-year growth. January 2024 alone saw exports worth USD 2.13 billion, 5.8% of total exports for the month. Rising tensions between the West and China have increased global reliance on India for bulk drugs. As the world’s largest provider of generic medicines, India exported USD 25.36 billion worth of drugs and pharmaceuticals in FY23. To foster innovation, India has raised the FDI limit to 100% for Greenfield projects and introduced new IP protection strategies.

Key Trends

1. The oncology segment in India's API industry is projected to grow significantly due to the increasing number of cancer cases. GLOBOCAN 2020 reported over 1.3 million new cancer cases, with the ICMR forecasting a rise in cancer patients to nearly 30 million by 2025. This surge necessitates the development of effective drugs, boosting India Active Pharmaceutical Ingredients (API) demand.
2. Government and company initiatives are enhancing cancer awareness, diagnosis, and treatment. For example, Wacoal India's partnership with the Cancer Patients Aid Association and Tamil Nadu's policy to identify early-stage cancers reflect efforts to address the disease. These initiatives increase the demand for chemotherapy and other drugs, fueling India Active Pharmaceutical Ingredients (API) market growth.
3. Chronic diseases like diabetes and neurological disorders are also driving the API demand in India. With 74 million diabetics in 2023, projected to reach 93 million by 2030, there is a pressing need for advanced medications.
4. The adoption of biosimilars and biologics is rising, exemplified by Biocon Biologics' agreements in Japan and Canada. Government initiatives, such as establishing bulk drug parks and financial incentives for pharmaceutical manufacturing, further support market growth.

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Competitive Landscape

The Indian API market is relatively fragmented, with many manufacturers aiming to expand their presence through collaborations, facility expansions, and drug approvals. The increasing activities of companies in developing branded drugs are boosting the demand for API's in India. For example, in October 2022, Glenmark launched a fixed-dose combination of Teneligliptin and Dapagliflozin to treat type-2 diabetes in adults. Key players in the market include Aurobindo Pharma, Teva Pharmaceutical Industries Ltd, Lupin Ltd, Viatris Inc., Sun Pharmaceuticals Limited, and Dr. Reddy's Laboratories Ltd. These companies are actively adopting strategies to strengthen their market position.

• In November 2023, Lupin Ltd. unveiled the world’s first fixed-dose triple combination drug for managing chronic obstructive pulmonary disease (COPD).
• In November 2023, Usan Pharma, a pharmaceutical company based in India, opened its new active pharmaceutical ingredients manufacturing facility in Madhya Pradesh, India. The project involves an investment of approximately Rs3bn ($36.06m) in two phases to increase Rusan Pharma’s API production capacity and address the growing demand for addiction treatment and pain management products domestically and globally.
• In October 2023, Glenmark Pharmaceuticals introduced Zita, a cost-effective triple combination drug for Type 2 diabetes treatment, enhancing glycaemic control in diabetic patients.

The India Active Pharmaceutical Ingredients (API) market is segmented as Business Mode, Synthesis Type and Application