The active pharmaceutical ingredients (APIs) are the component of any drug that produces its effects. Generic drugs contains the same active pharmaceutical ingredients as their brand-name counterparts. India being a leading exporter of generic drugs, the APIs manufacturers in India play a significant role in developing cost-effective generic drug formulations. The Indian pharmaceutical industry is focused on both generic drugs and active ingredients. APIs of various therapeutic categories like anti-infectives, cardiovascular, anti-diabetics, oncology, and gastrointestinal drugs are widely manufactured in India. The global generics industry has been growing steadily over the years, giving rise to higher demand for generic APIs.
The India Active Pharmaceutical Ingredients Market is estimated to be valued at US$ 24.5 billion in 2023 and is expected to exhibit a CAGR of 21% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Growth of the generics industry is one of the major driver boosting the India API market. As mentioned earlier, India is a prominent supplier of generic drugs globally. Rising healthcare expenditure and increasing preference for low-cost generics over branded formulations are fueling the growth of generics industry worldwide. This in turn is driving the demand for cost-effective generic APIs from India. Another driver augmenting the market growth is the growing need for cost-containment in the pharmaceutical supply chain. Manufacturers are focusing on reducing production costs by sourcing APIs from India, which is a leading producer and exporter of APIs globally owing to lower manufacturing and labor costs. These factors together are propelling the India active pharmaceutical ingredients market forward over the forecast period.
Segment Analysis
The India active pharmaceutical ingredients (API) market is dominated by the synthetic API segment which accounts for over 60% of the market share. Synthetic APIs are preferred in India due to low production costs and availability of raw materials. Many domestic pharmaceutical companies focus on synthetic API production to cater to the domestic demand for generic drugs. The cardiovascular, anti-inflammatory and analgesic segments constitute over 30% of the synthetic API demand in India.
PEST Analysis
Political: The Indian government actively supports the local API industry through favorable policies and regulatory reforms. It has taken steps to reduce dependency on Chinese imports and make India an exporter of APIs.
Economic: India enjoys cost advantages in API manufacturing due to availability of skilled workforce and raw materials at low prices. The country is poised to benefit economically from its push for self-reliance in pharmaceutical production.
Social: With a large population and growing disease burdens, domestic demand for medicines in India continues to rise rapidly. This augurs well for the domestic API industry.
Technological: Continuous technological upgrades in areas such as process R&D, process mapping, and quality analytics are helping Indian API players improve efficiency and meet evolving compliance standards. Synthetic routes are being refined for cost optimization.
Key Takeaways
The India Active Pharmaceutical Ingredients Market Size is estimated to be valued at US$ 24.5 billion in 2023 and is expected to exhibit a CAGR of 21% over the forecast period 2023 to 2030.
Regional analysis
The northern region dominates API production in India due to suitable climatic conditions and availability of infrastructure for bulk drug manufacturing. Himachal Pradesh and Punjab alone contribute to over 35% of the country’s total API output. Both states offer chemical zone promotions and tax incentives to attract investments.
Key players
Key players operating in the India active pharmaceutical ingredients (API) market are Dr. Reddy’s, Aurobindo Pharma, Divi’s Laboratories, Sun Pharmaceutical Industries, and Laurus Labs. Dr. Reddy’s and Divi’s Laboratories are among the leading exporters of APIs from India. Aurobindo Pharma and Laurus Labs focus on specialty APIs for regulated pharmaceutical markets.