New Delhi, March 2 (IANS). India’s active pharmaceutical ingredient (API) market is currently valued at $15-16 billion and is expected to grow at a CAGR (compounded annual growth rate) of 5-7 percent in FY27 and FY28. This information was given in a report released on Monday.
This growth will be driven by favorable government policies, structural shift towards higher capacity and complex APIs, growing domestic demand and deeper penetration in regulated and emerging markets, CareAge Ratings report said.
The report also said that Indian pharma companies are moving from basic APIs to complex APIs to prevent price erosion, increase profit margins and retain customers.
The report notes concerns over continued import dependence on China for key starting materials, but is hopeful that government initiatives and bulk drug parks supported by production-linked incentives are beginning to see progress.
“While it will take time to see the full impact of these measures, progress is clear: more than 30 projects have been completed and many companies have launched new capacities under the scheme,” the rating agency said.
Meanwhile, a pipeline of high-potential and complex APIs is being developed, which is expected to be commercialized in the coming years, indicating India’s gradual rise up the value chain.
Meaningful growth from this transformation is expected only after 2-4 years, as most of the projects concerned have not yet reached the stage of commercialization and substantial production increase.
“In the long run, the main drivers of growth are the aging population, better access to healthcare, increased insurance coverage, rise in chronic diseases, loss of monopolies and expansion into other emerging markets,” said Pritesh Rathi, associate director, CareAge Ratings.
Government-backed Bulk Drug Parks are set to shape the next phase of API investment, with nearly 80 per cent of the ongoing projects linked to this initiative. Major development projects include large-scale facilities being set up in Andhra Pradesh, Himachal Pradesh and Gujarat at a cost of Rs 20 to 40 billion, aimed at strengthening domestic API production, reducing dependence on imports and promoting cost efficiency across the region.
–IANS
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