India's pharma ambitions are running into a regulatory capacity constraint

Govt's decision under the ₹10,000 cr Biopharma SHAKTI programme to create a dedicated scientific review cadre within CDSCO is an important reform

India’s pharmaceutical industry has achieved extraordinary scale. We are the world’s third-largest producer by volume, supply around 20 per cent of global generic medicines, and exported $30.5 billion of pharmaceuticals in FY25. Yet, India ranks only eleventh globally in pharmaceutical exports by value, with a share of around 3 per cent. The next big leap must come from complex generics, biologics, biosimilars and innovation.

 

But there is an institutional constraint we need to confront directly. The Central Drugs Standard Control Organisation (CDSCO) has not built regulatory capacity at the pace at which India’s pharmaceutical ambitions have expanded.

 

For a generics-led industry, manufacturing scale and cost competitiveness were decisive. However, at the frontier of drug development, regulatory capability itself becomes an economic asset. A novel biologic, cell therapy or new molecule acquires commercial value only after its safety, efficacy and quality have been evaluated credibly. The speed, scientific depth and predictability of the regulator therefore influence where companies conduct research, locate clinical trials and deploy capital.

 

Pharmaceuticals require rigorous regulation because human lives are involved. The challenge is to build a regulator that is rigorous, scientific, predictable and fast. Four institutional weaknesses that stand out in current times.

 

The first weakness is the absence of permanent scientific cadre at CDSCO because of which India currently lags in evaluating the increasingly complex first-in-human applications. India continues to depend substantially on Subject Expert Committees comprising external specialists. External expertise will always be valuable, but it cannot substitute for a deep permanent cadre of full-time scientific reviewers. This becomes more consequential as India attempts to move from generics into innovative pharmaceuticals.

 

The absence of a permanent scientific cadre has resulted in India’s disproportionately small presence in early-stage drug development. Between 2008 and 2022, only 220 first-in-human Phase-I trials were registered and conducted in India. China recorded 2,842 Phase-I trials during 2011-20. The difference in scale is unmistakable. In 2015, China accounted for just over 4 per cent of the global innovative-drug pipeline. Today its share is close to 30 per cent. In the first half of 2025, Chinese companies originated 46 per cent of new drug molecules entering human trials globally.

 

China systematically strengthened regulatory science alongside industrial innovation. It created specialised review capability, aligned more closely with international standards and compressed clinical trial review timelines.

 

A 21st century CDSCO requires its own pharmacologists, toxicologists, biostatisticians, clinicians and specialists in biologics, cell and gene therapies, RNA therapeutics and other frontier technologies. The government’s decision under the ₹10,000 crore Biopharma SHAKTI programme to create a dedicated scientific review cadre within CDSCO is therefore an important reform. It must now be implemented with sufficient scale, specialisation and institutional authority.

 

The second weakness is CDSCO’s institutional capacity. India has more than 10,500 pharmaceutical manufacturing units. The Mashelkar Committee recommended as far back as 2003 a norm of one drug inspector for every 50 manufacturing units. Even on this basis, India requires around 210 inspectors merely for manufacturing oversight, before accounting for responsibilities across sales and distribution, imports, clinical trials, biologics and pharmacovigilance. As of December 2023, only 201 drug inspectors were in position against a sanctioned strength of 504.

 

The third weakness lies in institutional architecture. India’s drug-regulatory system divides responsibilities between CDSCO and state drug regulatory authorities. Manufacturing licences are principally administered by states, while CDSCO lays down standards, regulates imports and approves new drugs and clinical trials. Federal regulation requires common standards, seamless information-sharing and clear accountability.

 

India does not yet have a fully integrated national architecture in which licence information, inspection findings, laboratory failures, and enforcement actions flow seamlessly across jurisdictions. A serious violation identified by one state regulator should immediately alter the risk profile of that manufacturer everywhere in India.

 

The fourth weakness is performance against timelines and outcomes. CDSCO has statutory timelines for clinical trials and new-drug approvals, but what matters to innovators is the actual time taken from submission to final decision. Delays caused by repeated queries, multiple layers of review or prolonged pendency reduce predictability and raise the cost of innovation. CDSCO should therefore publish actual processing times, adherence to statutory timelines, pendency and the principal causes of delay. The real test of regulatory performance is whether safe and scientifically rigorous decisions are delivered consistently, transparently and within predictable timelines.

 

The next phase requires action on four fronts:

 

First, rebuild regulatory manpower on the basis of workload. India needs a fresh assessment of CDSCO and every state drug regulatory authority, covering inspectors, scientific reviewers, laboratory personnel, biostatisticians and specialist clinical assessors.

 

Second, build permanent scientific capability within CDSCO. Subject expert committees should supplement institutional expertise, not substitute for it. Specialist review teams for major therapeutic and technological platforms must become part of the regulator itself.

 

Third, create one national regulatory data architecture. Licences, inspections, testing failures, recalls and enforcement actions must be digitally integrated across the Centre and states. Risk-based regulation is impossible without complete, real-time information.

 

Fourth, make regulatory performance measurable. Actual approval timelines should be published by category. Queries should, wherever possible, be consolidated rather than raised sequentially. India should explicitly aim to become a leading destination for Phase-I and early-stage clinical development.

 

Two decades ago, India and China were far more closely identified with low-cost pharmaceutical manufacturing than with originating globally competitive innovative medicines. Their trajectories have since diverged sharply. India’s innovative pipeline has grown from roughly 270 assets in 2015 to around 450 in 2024, but China has moved to nearly 30 per cent of the global innovation pipeline. India still has an enormous opportunity. The domestic pharmaceutical market is projected to reach around $130 billion by 2030, while the broader bioeconomy has an ambition of reaching $300 billion.

 

For Viksit Bharat 2047, India must build precisely these industries — science-intensive, high-productivity, innovation-driven, export-oriented and capable of creating highly skilled employment. But industrial ambition cannot run ahead of regulatory capacity indefinitely.

 

The regulator must cease to be a constraint on India’s ambition and become one of its strongest competitive advantages. We need to build a strong institutional backbone to support a world-class pharmaceutical and biopharmaceutical industry and transform CDSCO into a world-class regulator.

 

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The author is chairperson, Fairfax Centre for Free Enterprise, and formerly India’s G20 Sherpa and CEO, NITI Aayog. Views expressed are personal