The Indian pharmaceutical industry is a global leader in generic drug production owing to its low-cost manufacturing capabilities. Active pharmaceutical ingredients (APIs) commonly referred as bulk drugs are principal components of any medicine without which drugs cannot be formulated. APIs are used by pharmaceutical companies as raw materials for the production of medicines. India exports APIs worldwide and holds a large share in the formulation of drugs consumed across the globe. The growth of the domestic pharmaceutical sector due to rising healthcare needs and increasing generic medicines penetration has substantially driven the demand for APIs in the country.
The global API market encompasses a broad spectrum of products from simple pain killers to complex anti-cancer drugs. APIs form an essential input for drug manufacturers and are critical to ensure an affordable and continuous supply of quality medicines. The APIs production clusters in India coupled with a large pool of educated workforce have enabled the country to become one of the world’s biggest suppliers of generic APIs. However, environmental norms and regulatory compliances have increased production costs but India still holds an undeniable advantage in API manufacturing.
The India Active Pharmaceutical Ingredients Market is estimated to be valued at US$ 15 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 key trends:
One of the major trends driving the growth of the India API market is the boost in domestic generic drug production through initiatives like ‘Make in India’. This program aims to transform India into a global pharmaceutical hub and reduce dependence on imports for APIs. It encourages local companies to invest in setting up API manufacturing units thereby augmenting domestic supply and export abilities. Additionally, depreciation of the Indian rupee against the US dollar provides API exporters a price advantage in the international market. This has stimulated foreign investments and collaborations to bolster API capacities in India.
Threat of new entrants: The threat of new entrants in the India Active Pharmaceutical Ingredients market is moderate. The regulatory approvals process and high capital requirements pose a barrier to new companies.
Bargaining power of buyers: The bargaining power of buyers in the India Active Pharmaceutical Ingredients market is high. Buyers can negotiate lower prices due to the availability of generic drugs from multiple manufacturers.
Bargaining power of suppliers: The bargaining power of suppliers in the India Active Pharmaceutical Ingredients market is moderate. Suppliers need to meet strict standards but global suppliers have more bargaining power.
Threat of new substitutes: The threat of new substitutes in the India Active Pharmaceutical Ingredients market is low as developing new drug molecules is a complex process.
Competitive rivalry: Competition in the India Active Pharmaceutical Ingredients market is high due to the presence of numerous domestic and global players.
The India Active Pharmaceutical Ingredients Market Size is expected to witness high growth. The market is driven by the availability of generic drugs at lower prices and government initiatives to boost local manufacturing. The India Active Pharmaceutical Ingredients Market is estimated to be valued at US$ 15 billion in 2023 and is expected to exhibit a CAGR of 21% over the forecast period 2023 to 2030.
Regional analysis: The Western region dominates the India Active Pharmaceutical Ingredients market currently. However, the Southern region is expected to see the fastest growth due to rising investment in pharmaceutical manufacturing facilities. States like Telangana and Karnataka are emerging as key hubs.
Key players: Key players operating in the India Active Pharmaceutical Ingredients market are Dr. Reddy’s Laboratories, Sun Pharmaceutical Industries, LUPIN, Aurobindo Pharma, Cipla. Dr. Reddy’s has a wide product portfolio while Lupin focuses on complex generics.