Economic Survey 2024: India’s pharma exports surge to $27.9 billion, API imports pose challenge

Despite an increase in India’s pharmaceutical sector’s export share to 6.4 percent in the fiscal year 2023-2024 (FY24) from 5.8 percent in the fiscal year 2018-2019 (FY19), and an uptick in export value to $27.9 billion from $19.1 billion, the industry is still reliant on imports for active pharmaceutical ingredients (APIs), particularly for antibiotics, according to the Economic Survey 2023-2024.  

The survey was presented in Parliament on July 22 by Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman. It indicated that India’s pharmaceutical sector has strengthened its position on the global stage. The market, currently valued at $50 billion, is the third-largest worldwide by volume. Known as the “pharmacy of the world”, India offers approximately 60,000 generic brands across 60 therapeutic categories, contributing 20 percent to global generic drug exports. Eight of the top 20 global generic companies are based in India. 

The survey pointed out that the sector maintains high compliance standards with 703 United States Food and Drug Administration (US FDA)-approved facilities, 386 European Good Manufacturing Practice (GMP)-compliant plants, and 241 World Health Organization Good Manufacturing Practice (WHO-GMP)-approved plants. In December 2023, revised manufacturing rules under Schedule-M were introduced to align with global standards and enhance quality control. 

“Despite these advancements, India remains reliant on imported APIs. The government’s Production-Linked Incentive (PLI) schemes have reduced some of this dependency by bolstering domestic manufacturing of antibiotics like Penicillin G and Clavulanic Acid,” the survey noted. 

“Between FY22 and FY24, the compound annual growth rate (CAGR) of bulk drug imports was 2.3 percent, compared to 5.9 percent for exports, making India a net exporter of bulk drugs. In FY24, bulk drug exports totalled Rs 39,632 crore, while imports were Rs 37,722 crore,” it added. 

The survey also found that the PLI scheme for medical devices is having a beneficial impact narrowing the gap between imports and exports. Domestic production now includes computed tomography (CT) scan machines, magnetic resonance imaging (MRI) machines and other medical devices. The PLI scheme for bulk drugs has approved 48 projects with a committed investment of Rs 3,938.6 crore to bolster local manufacturing. 

“While the PLI scheme in medical devices did motivate many large players to step forward and put-up projects to avail it, one must study how much was disbursed against the sanctioned amount and tweak it for betterment. In the next round of altered incentives, the government of India and department of pharmaceuticals (DoP) have planned to unveil these shortly in the next budget, so that the Prime Minister’s vision will be realised — not only for an Atmanirbhar Bharat in medical devices, but also for making India the leading manufacturing hub for medical devices, as stated in the National Medical Devices Policy announced last year,” said Rajiv Nath, Association of the Indian Medical Devices Industry (AiMeD). 

The initiative aims to make quality generic medicines available at affordable prices through Pradhan Mantri Bhartiya Janaushadhi Kendras (PMBJKs). Over 12,500 PMBJKs have been established, benefiting the general population and the economically disadvantaged. In FY23-24, the Pharmaceuticals & Medical Devices Bureau of India sold Jan Aushadhi medicines worth Rs 1,470 crore, resulting in savings of approximately Rs 7,350 crore. 

“The sector’s growth is driven by innovation, with expectations to reach $130 billion by 2030. The future of the industry relies on advancements in biopharmaceuticals, skill development, and a robust supply chain. India’s pharmaceutical industry, which balances innovation with cost-effective production of off-patent drugs, is important in enhancing global healthcare access,” said the survey.