Economic Survey 2025–26 calls on pharma to build complex portfolios

India’s pharmaceutical industry will need to move beyond its heavy reliance on plain generics and deepen its presence in complex drugs and biosimilars as export growth faces pressure in regulated markets, the Economic Survey 2025–26 tabled in Parliament on Thursday said.

While reaffirming India’s scale advantage, the Survey underlined the gap between volume and value in pharmaceutical exports. “The Indian pharmaceutical industry is the world’s third largest by volume, meeting approximately 20% of global generics demand,” it said, adding that exports reached 191 countries in FY25. More than half of these exports are directed to “highly regulated markets such as the United States and Europe”.

However, the Survey pointed out that India’s global position by export value remains limited. “India currently ranks 11th globally in pharmaceutical exports by value, with a 3% share,” it said, highlighting constraints in value realisation despite large-scale manufacturing.

Against this backdrop, the Survey said the industry is moving away from a volume-heavy model. “To move up the value chain, the pharmaceutical industry is shifting from a volume-driven to a value-driven approach, with greater emphasis on complex generics, biosimilars, and innovation,” it stated.

The Survey linked this transition to India’s experience following the introduction of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which brought stronger patent protection norms into force. Between FY01 and FY25, “pharmaceutical exports increased from $1.9 billion to $30.5 billion”. Rather than weakening the sector, it said, “the sector repositioned itself at the higher end of the pharmaceutical value chain”.

The survey report cited regulatory filings were cited as a key factor in gaining access to regulated markets. “India’s global share of Drug Master File (DMF) filings rose sharply from 14.5% in CY 2000 to 48.7% by CY 2007,” the Survey said. DMFs are detailed dossiers submitted to global regulators to demonstrate the quality and safety of active pharmaceutical ingredients and are a key requirement for supplying medicines to the US and Europe.

To support domestic manufacturing and reduce supply risks, the Survey highlighted policy measures targeting bulk drugs and quality upgrades. Under the production-linked incentive scheme for bulk drugs, “investments worth ₹4,763 crore as of September 2025” have been mobilised to cut dependence on imported active pharmaceutical ingredients and intermediates.

It also noted that “255 applications have been approved” under the Revamped Pharmaceuticals Technology Upgradation Scheme (RPTUAS), a programme aimed at helping manufacturing units upgrade facilities and comply with global regulatory standards.

Three bulk drug parks with a total outlay of ₹3,000 crore are under development in Gujarat, Himachal Pradesh and Andhra Pradesh, the Survey said, to provide common infrastructure and lower manufacturing costs for producers of key raw materials. Pharmaceuticals have been placed under the “Scale” category of the National Manufacturing Mission, alongside automotive, reflecting continued policy focus on the sector. 

At the same time, the Survey cautioned that future export growth will depend on capability building rather than cost advantages alone. It called for “strong R&D, market diversification to reduce dependence on a single market, and partnership-driven models such as co-development, licensing, and contract manufacturing”.
The Survey said India’s role as a global supplier of affordable medicines remains intact, but sustaining growth in regulated markets will require a sharper focus on complex products, quality standards, and regulatory compliance.