India pharma exports surge 9%, outpacing global average, says report

India has also surpassed the US in the number of FDA-registered generic manufacturing sites

India’s pharmaceutical sector, the world’s largest supplier of generic medicines, is poised for a new era of growth with exports growing at 9 per cent, nearly twice as fast as the global average, a report by McKinsey & Company said, while cautioning against “disruptions on the horizon” due to emerging trends in Indian and global landscapes.

 

India now meets 20 per cent of global demand, including 40 per cent of the US generic drug needs and 25 per cent of the UK market.

 

The country has also surpassed the US in the number of Food and Drug Administration (FDA)-registered generic manufacturing sites, with 752 FDA-approved, 2,050 World Health Organization Good Manufacturing Practices (WHO GMP)-certified, and 286 (European Directorate for the Quality of Medicines) EDQM-approved plants as of 2024.

   

The report, released at the 10th Global Pharmaceutical Quality Summit, also highlighted sharp improvement in compliance outcomes.

 

US FDA ‘Official Action Indicated’ (OAI) instances dropped by 50 per cent over the past decade and European Medicines Agency (EMA) non-compliance fell by 27 per cent.

 

Meanwhile, India continues to hold a 30-35 per cent cost advantage over the US and European manufacturers due to lower labour costs, efficiency improvements, and digital adoption.

 

The Indian pharmaceutical sector has expanded at an 8 per cent CAGR, twice the global average, strengthening its capabilities in active pharmaceutical ingredients (APIs) and biotechnology.

 

The country remains a preferred outsourcing destination, with a 30-35 per cent cost advantage over Western competitors. Emerging treatments, including mRNA, cell and gene therapies, and monoclonal antibodies, are growing at 13-14 per cent CAGR, surpassing conventional drug growth rates.

 

The report revealed AI and generative AI-driven advancements could unlock $60 billion to $110 billion in additional revenue, improve margins by 4-7 per cent, and enhance productivity by 50 per cent.

 

The top five Indian contract development and manufacturing organizations (CDMOs) have invested $650 million to expand their capabilities, reinforcing India's role in global pharma supply chains.

 

According to the report, despite its progress, the industry faces critical challenges as it reaches a tipping point. Disruptions such as digital transformation, smart automation, and the rise of new treatment modalities could reshape pharmaceutical operations. Geopolitical shifts, nearshoring trends, and increasing sustainability demands also pose potential risks.

 

The report outlines eight key themes for Indian pharma companies to consider, including achieving zero-error operations, leveraging AI and digital tools, optimising production costs, and enhancing sustainability efforts.

 

Vishnukaant Pitty, Partner at McKinsey and Company, said, “India’s pharmaceutical industry stands strong today because of the foundation built over the last decade. With disruptions on the horizon, companies must rethink their operating models to drive high performance and sustain global leadership.”