Pharmaceutical Sector in India: India is World’s 3rd Largest Market for Pharma
January 11, 2018
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As per 2017, India is world’s third largest market for pharmaceuticals on the basis of volume, and thirteenth largest on the basis of value. According to a report by Equity Master, India holds 20 percent share of global pharmaceutical market volume wise and 1.2 percent value wise. This isn’t all, Indian pharmaceutical sector has much higher scope for growth when compared to pharmaceutical sectors of other developed countries as India also houses highly skilled native scientists and engineers. Indian Pharmaceutical companies like Sun Pharma, Lupin, and Dr Reddy are counted among big names in the global pharmaceutical market.
All this is not without a reason. Despite having an advantage over developed countries because of the cheaper workforce, India hasn’t compromised on the quality of its pharmaceuticals. More than 2600 pharmaceutical drugs manufactured in India are FDA approved, and more than 540 company sites are UFDA approved. Here are some of the other reasons why India is most likely to stay in the forefront of pharma sector growth in future years:
Cheap Labour: Indian Labour costs almost half when compared to Western Labour.
Lesser Cost of setting up: Setting up a production plant in India is 40% cheaper than in Western Countries.
Skilled Workforce: Compared to other Asian countries, Indian workforce is more technically and managerially advanced.
Number of manufacturing plants: India has 2nd most USFDA approved manufacturing plants outside the US.
Number of Exports: In 2016-2017, India exported pharmaceuticals worth US$ 16.4 billion. This number is expected to reach $20 billion in 2020.
High Growth Rate: Indian Pharmaceutical Industry is expected to grow at a steady growth rate of 17% per annum.
Keeping all these factors in mind, the Indian government, as well as many reputed MNCs, have taken some major steps to help Indian Pharmaceutical Sector realize its potential. The Union Cabinet has made amendment in the existing FDI policy to allow FDI up to 100% in the automatic route of medical equipment manufacturing. This move is expected to draw great investments. In addition, the Indian government, in order to give a boost to Pharmaceutical sector, has launched ‘Pharma Vision 2020’, one of the main objectives of which is to reduce the time taken to give approval to the new facilities, which will certainly augment the investments.
In past few years, the Pharmaceutical sector in India has been very active and volatile, whereas the pharmaceutical sector of most of the developed countries has shown plain and stable growth. This is the indication that Indian Pharmaceutical sector is still in its growing phase, and anyone investing in it will surely reap great benefits in the coming years.