Important Reasons Behind the Success of Pharma Industry in India

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Reason behind the Success of Pharma industry in India

Reasons Behind the Success of Pharma Industry in India – The Indian Pharmaceuticals industry is one of the most successful industries of the world. The effective marketing strategies of pharmaceutical companies in India in support of the government have helped shaped the industry of today. The industry is growing enormously over the years. In this post, we are going to discuss the reasons behind the success of pharma industry in India.

A Look At The Pharmaceuticals Industry Of India

The Indian pharma industry was ruled by the British Empire. This meant India has less number of purely Indian pharma companies. The Indian pharma industry was growing tremendously. The industry becomes a part of the global revolution after liberalization in the government policies. This helped attract multinational companies to invest here.

The Industrial Policy Resolution of 1956 places the pharma industry in Schedule B. This encourages many private pharma companies. This resulted in a 100 crore turnover in 1962. India has been widely known for encouraging its quality man power and low costing affairs. The foreign companies started to dwell by setting up their own subsidiaries.

The Indian Patent Rights Act of 1970 helped gain the position that India holds in generic manufacturing. Our company mainly has process patents. This meant company could reverse engineer using the same drug formulation using a different manufacturing process. Reverse engineer means analysing a drug and know how it is made. Through this, the Patent law wasn’t broken and we easily achieved the titled of 3rd largest generic manufacturing industry in the world.

Facts and Statistics Of The Indian Pharma Industry

The Indian Pharma industry has come a long from fewer numbers of pharma companies and units to as many as thousands. The Government of India has played a major role in snake shifting the industry over the years. Some facts related to the Pharmaceuticals sector of India.

  • The Indian Pharma industry shares 5 percent of the Indian Gross Domestic Product (GDP).
  • The global share of India in the global pharmaceuticals sector is 1 to 2 percent. It is growing at a CAGR of 10 percent annually.
  • The value of pharma sector here was said to be USD 7 billion in the year 2016. The national growth is said to be CAGR 15.92 percent.
  • One of the biggest science-based industries of the nation. It has the capacity to meet the new technological demands to meet the growing complex drug manufacturing needs.

The taxation laws for this industry have been supportive for years. The introduction of excise duty-free zones and concessions has been one of the main reasons behind the success of the pharma industry in India. The GST effect has been neutral in comparisons of other sectors.

The HSN code and GST rate slabs may have made taxation simpler. The reasons for success is support of government for better exports, manufacturing capacities and contract research and manufacturing services or CRAMS.

The Reasons Behind The Success of The Indian Pharma Industry 

India is one of the largest pharmaceuticals industries in the world. Our country has been a major contributor of generics, APIs and pharma services all over the world. Here are the top reasons behind the popularity of the pharma industry of India:

Largest Generic Drugs Manufacturers

India is the 3rd largest manufacturer of generic drugs in the world. We have some of the largest approval of generic drugs or abbreviated new drug applications (ANDA) approvals in the U.S. Our country holds the largest number of US FDA-approved pharma units i.e. 200+ outside America. It meant owned one-third of the ANDA approvals.  We have the cheapest yet qualitative manpower in the world. The cost of prduction is low here. India shares 20% to 24% of the global generic drugs share.

Pharma Exports

Our country is one of the largest producers of active pharmaceutical ingredients (API) globally.  We have almost 300 different pharma companies including small scaled, medium scaled and large scaled players. The Indian Pharma industry is one of the largest exporters of drugs and APIs globally.

  1. Our country offers 70 percent of the domestic demands for bulk drugs.
  2. 40 percent of the total pharma products is exported.
  3. In 2016, the pharma export created a value of USD 651 million.
  4. The total export included 55 percent formulations and 45 percent bulk drugs.

Reverse Engineering Technology

The Patent Acts, 1970 and the Drug Policy in 1978 has helped shape the industry of pharmaceuticals. We have a science-based industry. This means we have the technology and technique to meet the pertaining complex drug manufacturing.

Our country has been ruling process patent (Product patent took place in 2015 and is yet to grow). The companies copied and manufactured medicines and drugs using different processes. It saved expenses made on Research and Development. The multinational companies saved up to 30 percent to 50 percent expenses by investment in research and development in India.


The Pharma industry in India has been the backbone of providing international accolades. The government has taken wide steps to support the pharma sector. The therapeutic sector has been growing at a rapid rate. The Pharma Vision 2020 goal will help the industry grow more over a  decade.