India's CRDMO sector looks to expand, looks to touch $25 bn by 2035: Report

India's contract research, development, and manufacturing organisation (CRDMO) sector is poised for expansion, with the potential to reach $22-25 billion by 2035.

 

According to a new report by Boston Consulting Group (BCG) and the newly formed Innovative Pharmaceutical Services Organisation (IPSO), India's strong cost advantages, rapid project startup capabilities, and evolving expertise in biologics position it as a global pharmaceutical innovation hub.

 

With a projected compound annual growth rate (CAGR) of 15 per cent, India's CRDMO market is expected to outpace global growth, driven by global supply chain realignment and rising demand for advanced therapies such as antibody-drug conjugates (ADCs), DNA and RNA therapeutics, and gene therapy.

   

This surge is also being driven by India's cost advantages compared to Western countries, 90 per cent faster project startup times, and global supply chain realignments that are prompting Western pharmaceutical companies to seek alternative hubs.

 

While India currently holds a 2-3 per cent share of the global CRDMO market, estimated at $140-145 billion, the report highlights its potential for much greater dominance. The ongoing global supply chain realignment is creating a $10 billion opportunity for Indian CRDMOs as Western pharmaceutical companies look for alternative hubs.

 

Key factors driving this growth include the global push to diversify supply chains, pricing pressures, policies such as the Inflation Reduction Act (IRA) accelerating offshoring, and increasing investments in research and development (R&D) and infrastructure within India.

 

The report also identifies critical challenges that must be addressed to sustain this growth. These include the need for a six- to sevenfold expansion of the talent pool by 2035, faster regulatory approvals, a stronger tier-I supplier base to reduce import dependence, increased funding, lower capital costs, and improved environmental, social, and governance (ESG) compliance.

 

To address these challenges and capitalise on the sector's potential, 11 leading Indian CRDMO companies have joined forces to launch IPSO. This industry body aims to strengthen India's position in the global pharmaceutical value chain by fostering collaboration, advocating for supportive policies, and driving innovation. The Indian government has allocated over Rs 25,000 crore to boost biotech and pharmaceutical innovation, supporting a self-sufficient ecosystem.

 

"The Indian CRDMO sector is poised for a major transformation, with the potential to become a leader in serving the global biopharma and life sciences outsourcing market," said Peter Bains, chief executive officer designate, Syngene International. "Realising this opportunity will require change and collaboration among all stakeholders in the Indian CRDMO ecosystem."

 

Manni Kantipudi, chief executive officer and whole-time director, Aragen Life Sciences, added, "India’s CRDMO sector has all the right ingredients to scale. However, to compete at a global level, Indian CRDMOs must not only scale capabilities in new modalities but also work together to build a resilient supply chain and streamline regulatory pathways."

 

BCG managing director and partner Vikash Agarwalla commented, "India’s CRDMO industry is at the beginning of its 'Amrit Kaal', with many strong tailwinds... unlocking this full potential will require a collective push from both industry and policymakers."

 

The report concludes with five key imperatives for unlocking India's CRDMO potential: accelerating talent development, streamlining policies, strengthening the supplier ecosystem, expanding capital access, and enhancing sustainability.