Time for India to become pharmacy of the world: Economic Survey

The Economic Survey has said that Indian pharmaceutical sector needs to rise to the opportunity presented by the pandemic and emerge as the Pharmacy of the World.


“Covid-19 has presented both an opportunity and a challenge for India to emerge as the pharmacy of the world,” it said.


It suggested that India needs to broaden its base in terms of markets, as well as product categories. It needs to pursue opportunities in newer product classes like biosimilars, gene therapy and specialty drugs and increase exports to large and underpenetrated markets like Japan, China, Africa, Indonesia, Russia/CIS countries, Brazil and Latin America. According to the Economic Survery this can usher-in the next leg of growth for Indian pharma industry.

The Economic Survey also calls for restructuring the current regulatory mechanism, upgrading and building capacities at various National Institute of Pharmaceutical Education and Research (NIPERs).

It has also said that the pharma industry needs greater R&D expenditure to move up the value chain from generics to Novel Chemical Entities (NCEs).

According to the survey, during April-October, 2020, India’s pharmaceutical exports totaling US$ 11.1 billion witnessed an impressive growth of 18.0 per cent, as against US$ 9.4 billion during the corresponding period a year ago.

“The global pharmaceutical market is set to exceed US$ 1.5 trillion by 2023,” it said. At present, the Indian pharmaceutical industry is valued at US$ 41 billion and is expected to grow to US$ 65 billion by 2024 and about US$ 120-130 billion by 2030.

The commitment of provision of Covid-19 vaccine to other countries has made India the epicentre for its manufacturing.

It said that due to a significant raw material base and availability of a skilled workforce India has emerged as an international manufacturing hub for generic medicines.

India is the only country with the largest number of US-FDA compliant pharma plants (more than 262 including APIs) outside of the USA. “This has led to an increase in the share of pharmaceuticals exports in India’s total exports from 5.1 per cent in April-October, 2019 to 7.3 per cent in April-October, 2020, making it the third largest exported commodity,” it said.

According to data available from US-FDA, Indian pharma companies have garnered nearly 45 per cent of all new abbreviated new drug application (ANDAs) approvals over the past nine months, which is expected to aid exports growth in the coming years.

However, the survey said that the pandemic also exposed the excessive dependence of Indian pharmaceutical industry on China for sourcing Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs).

“There is a disproportionate dependence of Indian pharma exports on the USA and generics. To get over this challenge, pharmaceuticals drugs have been identified as one of the ten key sectors for introducing Production Linked Incentive (PLI) Scheme for enhancing India’s manufacturing.