India's pharma industry shifts to high-value drugs, advanced manufacturing to cut China dependence: Report

India's pharmaceutical industry is accelerating its shift towards high-value medicines, complex chemistry and advanced therapies while investing in domestic manufacturing to reduce dependence on imported active pharmaceutical ingredients (APIs), particularly from China.

The transition comes as India's domestic pharmaceutical market recorded 17.1% year-on-year growth in September 2026, its strongest monthly expansion in three years, according to IQVIA data.

Demand for medicines treating diabetes, metabolic disorders and cancer is driving investments in specialty formulations and advanced manufacturing. Pharmarack data showed GLP-1 therapies recorded 72% value growth and accounted for 13% of India's diabetes market.

China dependence remains a challenge

Despite expanding manufacturing capabilities, India's reliance on imported pharmaceutical ingredients remains significant.

India imported approximately $4.35 billion worth of bulk drugs and APIs in FY25, with China accounting for 73.71% of the total.

According to NITI Aayog data cited in industry assessments, Chinese APIs remain 35–40% cheaper than domestic alternatives, highlighting the cost challenges facing Indian manufacturers.

Government initiatives are seeking to address this dependence. By June 2026, the pharmaceutical Production Linked Incentive (PLI) scheme had attracted ₹46,744 crore in committed investments and generated cumulative sales of ₹4.03 lakh crore.

Under the Bulk Drugs PLI scheme, investments reached ₹5,210.74 crore, with 39 manufacturing projects commissioned.

Industry invests in advanced manufacturing

Deepak Jain, CEO and Managing Director of Jubilant Ingrevia, said domestic capabilities in APIs, advanced intermediates and contract development and manufacturing organisation (CDMO) operations would be critical to reducing import dependence.

Jubilant Ingrevia has invested approximately ₹2,000 crore over three years in new manufacturing facilities spanning 35 technology platforms, supported by AI-optimised manufacturing and green energy integration.

Pankaj Banerjee, Head of Global Exports Business at Hamdard Laboratories India, highlighted opportunities in standardised herbal medicines, preventive healthcare and international markets.

Shiva Kabra, Joint Managing Director of Control Print Ltd, emphasised the growing importance of advanced packaging technologies in ensuring precise dosage delivery, product protection and reduced wastage.

Exports strengthen growth prospects

India's pharmaceutical exports reached $30.47 billion in FY25, while shipments during April–June FY27 stood at $8.10 billion, registering 6.8% annual growth.

Yogesh Mudras, Managing Director of Informa Markets in India, said India's pharmaceutical industry was making significant progress in strengthening its global competitiveness and technological capabilities, supported by investments in advanced manufacturing, automation and quality management systems.

Citing government data, Mudras highlighted that the pharmaceutical drugs PLI scheme had generated approximately 1.15 lakh jobs by March 2026, reflecting the sector's expanding manufacturing footprint and employment potential.

He emphasised that coordinated private-sector investments in automation, API synthesis and stringent quality management systems were helping Indian pharmaceutical companies move towards more sophisticated, innovation-driven manufacturing.

Mudras added that CPHI India and PMEC India 2026 would bring together pharmaceutical manufacturers, ingredient suppliers, CDMOs and technology providers to facilitate global partnerships, address technological bottlenecks and unlock commercial opportunities across the pharmaceutical value chain.

CPHI India will be held from November 23–25 at Yashobhoomi in New Delhi, while PMEC India will take place from November 24–26 at the India Exposition Mart in Greater Noida.

(With PTI inputs)