India's pharmaceutical industry is undergoing a significant transformation, moving away from its traditional focus on low-cost generic drugs towards advanced therapies, complex chemistry, and sophisticated manufacturing processes. This strategic pivot is largely motivated by a desire to reduce dependence on imported Active Pharmaceutical Ingredients (APIs), especially from China, and meet burgeoning domestic and international demand.
Driving Forces: Demand and Self-Reliance
The shift is propelled by several factors, including a robust domestic market that saw a 17.1% year-on-year growth in September 2026—its strongest monthly expansion in three years, according to IQVIA data. Demand for medicines treating chronic conditions like diabetes, metabolic disorders, and cancer is particularly strong, spurring investments in specialty formulations and advanced manufacturing capabilities. For instance, GLP-1 therapies recorded a 72% value growth and now constitute 13% of India's diabetes market, as per Pharmarack data.
Addressing China Dependence
Despite expanding domestic manufacturing, India's pharmaceutical sector remains significantly reliant on imported bulk drugs and APIs. In FY25, India imported approximately $4.35 billion worth of these ingredients, with China accounting for 73.71% of the total. Chinese APIs are estimated to be 35–40% cheaper than domestic alternatives, posing a considerable cost challenge for Indian manufacturers.
To counter this, the Indian government has initiated schemes like the Production Linked Incentive (PLI) for pharmaceuticals. By June 2026, the pharmaceutical PLI scheme had attracted committed investments of ₹46,744 crore and generated cumulative sales of ₹4.03 lakh crore. A separate Bulk Drugs PLI scheme saw investments of ₹5,210.74 crore, leading to the commissioning of 39 new manufacturing projects.
Industry Investments and Innovation
Leading industry players are heavily investing in this transition. Deepak Jain, CEO and Managing Director of Jubilant Ingrevia, highlighted the critical role of domestic capabilities in APIs, advanced intermediates, and Contract Development and Manufacturing Organisation (CDMO) operations. Jubilant Ingrevia alone has invested around ₹2,000 crore over three years in new manufacturing facilities, integrating AI-optimised processes and green energy across 35 technology platforms.
The focus also extends to specialized areas. Pankaj Banerjee of Hamdard Laboratories India sees opportunities in standardized herbal medicines and preventive healthcare, while Shiva Kabra of Control Print Ltd emphasizes advanced packaging technologies for precise dosage and product integrity.
Strengthening Global Competitiveness and Exports
India's pharmaceutical exports are also on an upward trajectory, reaching $30.47 billion in FY25. Shipments during April–June FY27 showed a 6.8% annual growth, totaling $8.10 billion. Yogesh Mudras, Managing Director of Informa Markets in India, noted that these advancements, supported by investments in automation and stringent quality management, are enhancing India's global competitiveness.
The pharmaceutical drugs PLI scheme has created approximately 1.15 lakh jobs by March 2026, underscoring the sector's expanding footprint and employment potential. Events like CPHI India and PMEC India are set to further facilitate global partnerships and address technological bottlenecks, driving the industry towards more sophisticated, innovation-driven manufacturing.