India’s pharmaceutical manufacturing base is steadily closing the quality gap with global peers — and in some areas, pulling ahead. US Food and Drug Administration (USFDA) inspection data over the past decade show a clear structural shift: while global pharma has seen inspection outcomes worsen despite fewer audits, Indian plants have delivered fewer adverse findings even as scrutiny has become sharper, more frequent and increasingly unpredictable.
The numbers underline the shift. Between 2015 and 2025, the share of Official Action Indicated (OAI) outcomes for Indian pharma plants fell from 12 per cent to 8 per cent, even as inspections moved to surprise or near-zero notice formats. Over the same period, global pharma saw OAI rates rise from 9 per cent to 13 per cent, according to data compiled by the Indian Pharmaceutical Alliance (IPA) (see chart). The divergence matters because inspections today are far tougher than a decade ago.
An Official Action Indicated (OAI) outcome signals serious violations warranting enforcement action such as warning letters or import alerts. A Voluntary Action Indicated (VAI) outcome flags deficiencies requiring corrective steps without immediate enforcement, while a No Action Indicated (NAI) outcome indicates full compliance.
As Sudarshan Jain, secretary general of IPA, puts it, the industry has had to adopt a “ready at all times” mindset. “Most inspections today are unannounced or with only one or two days’ notice. Facilities are expected to be inspection-ready 24x7. This is now the norm globally,” he said.
That preparedness has been deliberate. Over several years, IPA has pushed the industry away from episodic, inspection-led compliance towards a risk-based, systems-driven quality approach.
Inspection data show repeat observations in traditional problem areas have declined, pointing to institutional learning rather than box-ticking. Notably, nearly 80 per cent of OAIs now originate from smaller firms rather than the top 20–30 Indian pharma companies, suggesting larger players have largely internalised global good manufacturing practice (GMP) standards.
Regulatory focus itself has evolved. A decade ago, inspections centred on basic manufacturing controls. Today, regulators are probing deeper risks — contamination and cross-contamination in multi-product plants, robustness of cleaning validation, and the integrity of engineering and infrastructure systems. “As QC and documentation become more automated, regulators are increasingly scrutinising whether outsourced engineering and service providers truly understand GMP,” said Satya Prathipati, senior partner at McKinsey.
Behind the improving outcomes is a broader effort to build what IPA describes as a talent-, trust- and technology-led ecosystem. New training programmes, specialised quality courses and closer collaboration with NIPERs are aimed at creating a pipeline of industry-ready professionals aligned with modern regulatory expectations.
Technology is the second pillar. Prathipati argues India does not need to reinvent every solution but must lead where the stakes are highest. “There is no one-size-fits-all answer for AI adoption in pharma. We can be fast followers where global solutions are mature. But in manufacturing operations, given India’s role as a major drug supplier, we must be trendsetters rather than followers,” he said. AI-enabled quality monitoring, predictive maintenance and deviation analysis are gaining traction, though regulators remain clear that final decisions must rest with humans. Both the USFDA and the UK regulator have encouraged AI adoption while insisting on human accountability.
These gains come amid a complex global backdrop. In the US, the ongoing Section 232 investigation has raised concerns over supply-chain security, though Jain stresses there is “no direct impact on generic medicines so far”. What is beyond dispute, he says, is India’s role in global affordability. “Generics constitute 90 per cent of volumes in the US but only 13 per cent of value. Indian generic drug supplies result in $200 billion in annual savings to the US — $1.2 trillion over a decade.”
Supply-chain resilience, however, remains the weak link. India continues to depend heavily on China for certain APIs — especially fermentation-based products — and for low-cost machinery. Jain acknowledges the imbalance but notes that India exports more APIs than it imports, and import growth has slowed following production-linked incentives. “API self-reliance takes time. It has taken three to four years just to set up manufacturing, secure approvals and stabilise production,” he said, estimating that full rebuilding will take another four to five years.
Machinery dependence poses a parallel challenge. Chinese equipment is far cheaper than European alternatives, but servicing and maintenance are fraught. “If something goes wrong, maintenance becomes a serious issue because Chinese technicians coming to India is a major hurdle,” Jain said. That is why IPA has backed policy measures to protect domestic equipment capability, even when imports appear cheaper. Low prices, he cautions, can be a short-term tactic to eliminate local suppliers and deepen long-term dependence.
The broader strategy is diversification. India supplies medicines to more than 200 countries, with exports of about $30 billion split across the US, Africa and Latin America. The ambition is to scale exports to $80 billion, but that will require regulatory alignment, faster approvals and deeper engagement with local regulators. Africa and Latin America offer near-term opportunities, while Japan and China remain structurally difficult.
Quality credibility will also be decisive in attracting global clinical trials and contract manufacturing work, especially as companies seek to de-risk supply chains from China under initiatives such as the US Biosecure Act.
| Category | Year | Total Inspections | NAIs + VAIs | OAIs | % OAIs of Total |
| Global Pharma (Ex-India) | 2015 | 1679 | 1535 | 144 | 9% |
| Global Pharma (Ex-India) | 2025 | 921 | 805 | 116 | 13% |
| Indian Pharma | 2015 | 205 | 180 | 25 | 12% |
| Indian Pharma | 2025 | 157 | 145 | 12 | 8% |
Footnotes: 1. Calendar Year; Project Area: Drug Quality Assurance; Product Type: Drugs
2. Global Pharma figures exclude India
Source: Indian Pharmaceutical Alliance (IPA); US FDA Inspections Database
 "Indian drugmakers notch cleaner USFDA inspections as global outcomes worsen")
