India Gains Ground in Global Pharma Supply Chain: Report

The report highlights that this growth, driven by rising pharmaceutical outsourcing and regulatory support, could further accelerate to a high-teens CAGR, potentially pushing the sector’s value to USD 22 billion by 2030.

India is increasingly becoming a key player in the global pharmaceutical supply chain. According to a report by Macquarie Equity Research, its Contract Research, Development, and Manufacturing Organization (CRDMO) industry is projected to expand from USD 7 billion to USD 14 billion by 2028.

The report highlights that this growth, driven by rising pharmaceutical outsourcing and regulatory support, could further accelerate to a high-teens CAGR, potentially pushing the sector’s value to USD 22 billion by 2030.

Macquarie’s report attributes this expansion to a combination of factors, including global supply chain restructuring, regulatory initiatives, and cost advantages that make India an attractive alternative for pharmaceutical manufacturing.

Key Findings

According to the report, one of the critical drivers of India's CRDMO sector is the US Biosecure Act, which encourages global pharmaceutical firms to diversify supply chains and reduce reliance on China.

"The Indian CRDMO industry, valued at around USD 7bn, is set to deliver a 14 pc CAGR to around USD 14bn by 2028. Furthermore, we believe that regulatory tailwinds, such as the US Biosecure Act, could accelerate this growth to a high-teens CAGR," the report stated.

India’s 30-40% cost advantage over Western manufacturers is also crucial in its growing appeal. The country's regulatory track record, including approvals from agencies like the USFDA and EMA, enhances its credibility as a reliable manufacturing hub.

Pharma Cos Shift Towards India

As global pharmaceutical companies seek cost-effective and high-quality manufacturing partners, India is becoming a preferred destination for small-molecule drug development and production.

While China remains the dominant player in the pharmaceutical contract development and manufacturing (CDMO) sector, geopolitical risks and cost pressures are prompting companies to explore alternatives.

Macquarie’s report points out that "India's expertise in Active Pharmaceutical Ingredients (APIs), Highly Potent APIs (HPAPIs), and specialty chemicals further strengthens its position in the global pharmaceutical supply chain."

The broader Asia-Pacific CDMO sector was valued at over USD 50 billion in 2023, reflecting the increasing trend of outsourcing pharmaceutical manufacturing to cost-efficient regions.

With a favorable regulatory environment, competitive pricing, and rising global demand, India's CRDMO sector is well-positioned for sustained growth in the coming years.