India's pharmaceutical sector is poised on the brink of a transformative era. As it steps into 2026, the industry embarks on a crucial five-year window to construct the necessary ecosystem to establish itself as a global innovation hub. This journey is central to its ambitious goal of becoming a USD 500 billion sector by 2047, even as it navigates immediate challenges like tariff fluctuations and shifts in global trade.
The Defining Shift from Generics to Innovation
Having expanded from a USD 3 billion to a USD 60 billion behemoth over the past quarter-century, largely on the back of generic medicines, the domestic drug industry is now decisively pivoting. The focus is intensifying on innovation in next-generation drugs, including complex generics and biosimilars. Simultaneously, the sector is eyeing a massive opportunity: capturing a share of drugs worth over USD 300 billion that are scheduled to lose their patent exclusivity within the next seven years.
"Today, Indian pharma stands at a defining moment and the next 25 years will be shaped by innovation, quality, and access," stated Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance (IPA). He emphasized that the innovation agenda has gained significant momentum among domestic players.
Policy Momentum and the Critical Execution Phase
Jain asserted that the period from 2026 will be critical for execution, where policy momentum must translate into tangible gains. He highlighted the government's supportive measures, particularly the PRIP (Promotion of Research and Innovation in Pharma MedTech sector) scheme and the newly announced Research Development Incentive Scheme with a biomanufacturing focus. "This is particularly timely," he noted, referencing the impending patent cliffs.
Signs of this shift are already visible. Leading Indian pharmaceutical companies are actively acquiring higher-value products, securing licensing deals, and gaining regulatory approvals for advanced therapies. The IPA, which represents 23 major firms like Sun Pharma and Dr. Reddy's, is at the forefront of this change.
Building Resilience and a Value-Driven Future
Echoing the sentiment of a pivotal juncture, Anil Matai, Director General of the Organisation of Pharmaceutical Producers of India (OPPI), acknowledged near-term headwinds. However, he stressed they reinforce the need for resilient, high-quality manufacturing ecosystems. OPPI represents research-based global companies such as Pfizer and GSK.
Matai praised the government's focus on elevating manufacturing standards, strengthening intellectual property (IP) protection, and aligning with global benchmarks as "transformational." This dual emphasis on quality, innovation, and a predictable IP environment is catalyzing a move from volume-led growth to value-driven differentiation, he explained.
"Indian innovators are increasingly investing in complex generics, biosimilars, and next-generation therapies that address unmet patient needs both domestically and in regulated markets," Matai added. He pointed to efforts in regulatory harmonisation and industry-academia linkages as key to harnessing India's scientific talent.
Converging Sectors: Healthcare and MedTech Echo the Call
The pivotal decade starting 2026 resonates across related sectors. Ameera Shah, President of NATHEALTH, stated that the healthcare industry is also entering its most crucial phase. With therapies going off-patent and new care models emerging, India has a chance to expand both access and global leadership, she said. "If 2025 was the year of intent, 2026 must be the year of implementation," Shah emphasized.
In the MedTech space, executives like Bharath Sesha of Philips pointed to policy reforms like GST changes as energizing the sector. The focus for 2026 and beyond must be on long-term investment in R&D and advanced technologies, with AI playing a key role in strengthening diagnostics and infrastructure utilization.
Himanshu Baid of Poly Medicure reiterated the importance of sustained policy support to accelerate the sector's shift from a manufacturer to a genuine innovator. Deeper localisation of components, greater investment in high-value R&D, and faster clinical validation will be essential to strengthen India's global market share, he concluded.
