India's Pharmaceutical Industry Embraces Value-Driven Transformation
India's pharmaceutical sector is undergoing a significant strategic shift, moving away from a traditional volume-driven model toward a more sophisticated value-driven approach, as highlighted in the Economic Survey 2025-26. This transformation aims to elevate the industry's position in the global value chain through increased focus on complex generics, biosimilars, and innovation.
Global Standing and Export Performance
The Economic Survey reveals that India maintains its position as the world's third-largest pharmaceutical industry by volume, supplying approximately 20 percent of global generics demand. In the fiscal year 2025, the sector achieved an impressive annual turnover of ₹4.72 lakh crore, with exports reaching 191 countries. Over the past decade, from FY15 to FY25, pharmaceutical exports have demonstrated consistent growth at a compound annual growth rate of 7 percent.
Notably, more than 50 percent of these exports are directed toward highly regulated markets, including the United States and Europe. While India ranks 11th globally in pharmaceutical exports by value, holding a 3 percent share, the Economic Survey identifies substantial potential for further expansion and value enhancement.
Strategic Focus on High-Value Segments
To accelerate this upward movement in the value chain, the industry is intensifying its emphasis on several key areas:
- Complex Generics: Developing advanced generic formulations that require sophisticated manufacturing processes.
- Biosimilars: Expanding into biologic medicines that offer higher therapeutic value and market potential.
- Innovation: Investing in research and development to create novel drugs and therapies.
Beyond its dominance in generics, India has established itself as a global leader in low-cost vaccine supply. The country provides the majority of the world's diphtheria, tetanus, and pertussis (DPT) vaccines, Bacillus Calmette-Guerin (BCG) vaccines, and measles vaccines, demonstrating its crucial role in global healthcare security.
Medical Devices Sector Expansion
The Economic Survey also highlights remarkable progress in India's medical devices sector, which is rapidly becoming globally competitive. In FY25, medical devices exports reached 187 countries, growing significantly from USD 2.5 billion in FY21 to USD 4.1 billion in FY25.
The industry has successfully expanded its manufacturing capabilities to include high-end equipment such as:
- MRI and CT scanners
- Linear accelerators
- Cardiac stents
- Ventilators
This diversification into sophisticated imaging and life-support technologies represents a substantial shift toward high-tech medical manufacturing, marking a new era of technological advancement in India's healthcare sector.
Future Growth Imperatives
The Economic Survey emphasizes that scaling up the medical devices sector requires strategic initiatives to reduce import dependence. Key recommendations include:
- Adopting advanced manufacturing technologies such as artificial intelligence and 3D printing
- Streamlining global certification processes to strengthen international market access
- Enhancing domestic manufacturing capabilities across the value chain
This comprehensive shift from volume to value represents a pivotal moment for India's pharmaceutical and medical devices industries. By focusing on innovation, complex products, and advanced manufacturing, the sector is poised to capture greater value in global markets while strengthening India's position as a healthcare innovation hub.
