Active pharmaceutical ingredients are an integral part of any drug or medicine as they produce the intended effects. Growing prevalence of chronic diseases and rising healthcare expenditure have triggered the demand for pharmaceutical drugs in India. Continuous manufacturing technologies help improve API production efficiency and minimize the environmental footprint of pharmaceutical manufacturing plants.

The India active pharmaceutical ingredients (API) market is estimated to be valued at US$ 27,014.17 billion in 2024 and is expected to exhibit a CAGR of 21% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the India active pharmaceutical ingredients market are AVL, Cummins, Inc, Johnson Matthey Battery Systems, L&T Technology Services, Merlin Equipment Ltd., Navitas System, LLC, Nuvation Engineering, The Ventec Company, Toshiba Corporation, TWS (Technology with Spirit), and Vecture Inc. They are investing in R&D to develop superior API production technologies.

The market provides significant opportunities for companies involved in contract manufacturing and generic drug development. Rising incidence of chronic diseases is driving the demand for low-cost generic drugs in India.

Adoption of continuous manufacturing and Industry 4.0 technologies allows real-time process monitoring, data analytics, automation and remote control of API production plants. This improves manufacturing efficiency and speeds up regulatory approvals of new drugs.

Market drivers

Growing burden of chronic diseases such as cancer, diabetes, cardiovascular disorders in India is the prime factor augmenting the pharmaceutical drugs market. According to a recent report, non-communicable diseases account for 60% of total deaths in India annually. As affordable healthcare becomes priority, demand for generic drugs is increasing rapidly. This is positively impacting the API market. Adoption of advanced production technologies ensures stable supply of high-quality API at competitive prices. It helps drug makers minimize production costs and comply with global quality standards.

Current challenges in India Active Pharmaceutical Ingredients Market

The India Active Pharmaceutical Ingredients (API) market is currently facing various challenges. Stringent regulatory frameworks focusing on safety and quality are increasing compliance costs significantly for manufacturers. Many Indian manufacturers are struggling to meet the complex standards of developed markets. Availability of raw materials is also an issue as they have to import certain key starting materials and intermediates. High reliance on imports exposes manufacturers to volatility in prices and supply risks. Further, increasing complexity of drug molecules being developed makes synthesis and scale-up more difficult. This requires heavy investments in R&D and advanced manufacturing infrastructure. Intense competition from Chinese manufacturers on pricing is another challenge for domestic players. However, the government's initiatives to boost local manufacturing through production-linked incentives could help alleviate some of these challenges over the long run.

SWOT Analysis

Strengths: India has a large pool of experienced and low-cost technical manpower for pharmaceutical R&D and manufacturing. Domestic demand for generics and biologicals is growing rapidly providing a big market opportunity. Government policy support through schemes like PLI augur well for the sector.

Weaknesses: Infrastructure weaknesses like inconsistent power supply and outdated port facilities increase operational costs. India lags behind in advanced integrated manufacturing technologies for niche APIs. High reliance on imported raw materials increases vulnerability to external supply chain disruptions.

Opportunities: India can leverage its capabilities to emerge as a strong alternative global API supplier amidst growing trade tensions between China and other major countries. Rising demand for generics and emphasis on self-sufficiency by developed nations presents substantial export potential. Collaboration with global pharmaceutical firms can help acquire new technology capabilities.

Threats: Increasingly stringent regulations may reduce India's cost competitiveness versus China. Delay in infrastructure upgrades and unfavorable policy changes can dampen India's efforts to become an integral part of global pharmaceutical value chains. Patent expiries of blockbuster drugs can impact industry's growth in the medium term. Intensifying global competition requires continuous innovation.

Geographical Regions

In terms of value, North India accounts for the largest share in the India API market currently owing to the presence of major pharmaceutical clusters like Delhi NCR, Punjab and Haryana. These regions have emerged as prominent API hubs backed by factors like accessibility to key ports, skilled workforce and established supply chain networks of pharma companies.

South India, especially Andhra Pradesh and Telangana, is expected to witness the fastest growth over the coming years supported by proactive government interventions. States like Gujarat, Maharashtra and Himachal Pradesh are also well-placed to increase their market share led by ongoing investments in infrastructure and incentivized schemes for API manufacturing.

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About Author:

Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)