India is the world’s largest exporter of generic drugs, but recently, questions have arisen about this success. Drug regulators from countries importing medicines from India, including the World Health Organisation (WHO), have expressed concerns about the safety and quality of Indian drugs. As a result, India is improving its approval process for medicine exports.
Let’s see what steps India is taking to establish trust in the quality of Indian medicines and what the current situation of the Indian pharma industry is.
What’s Happening?
The Indian pharmaceutical industry is currently worth $50 billion and ranks 13th in terms of value and third in terms of volume worldwide. Moreover, India produces over 60,000 generic medicines across more than 60 medicine categories and exports drugs to over 200 countries.
India fulfils over 50% of Africa’s demand for generic drugs, 40% of America’s generic demand, and 25% of all drugs in Britain. India also contributes 60% to global vaccine demand. These figures demonstrate the strong position of India’s pharma sector.
Increase in Indian Drug Exports
While the world is facing a downturn in trade, Indian medicine exports are growing at a steady rate. Despite geopolitical tensions and reduced global demand, there has been a growth of 9.67% in drug exports, reaching $27.8 billion in FY24, compared to a 3% decline in total exports in the previous fiscal year. Just in March, there was a 12.73% growth with $2.8 billion in pharma exports.
You can understand the year-on-year growth of Indian medicine exports from this graph:
Additionally, if we look at American exports, by February 2024, India had exported $7.83 billion worth of drugs in just 11 months.
According to experts, 73% of the medicines exported from India to foreign countries are generic medicines. Moreover, India has witnessed tremendous growth in Indian Active Pharmaceutical Ingredients (API) in countries like America, Europe, and Africa. This is a positive sign for the Indian pharma industry.
Concerns About Quality
Concerns have been raised in some countries regarding the quality of Indian drugs. For example, recently, adulteration was found in Indian spices in Hong Kong and Singapore, leading to a ban on them.
In the case of drugs, too, some countries have raised questions about the quality of Indian drugs. However, despite the increasing exports of Indian drugs, it is not the time to overlook quality concerns. Therefore, India is making improvements in the approval process for exports, and certificates related to drug exports will be made according to the standards of the World Health Organisation in the new arrangement.
What Does This Mean for Investors?
The pharmaceutical sector is emerging as a strong sector for India. The increase in drug exports indicates that this sector is performing well, which could be a good sign for investors. However, it is also essential for investors to pay attention to aspects such as company performance, correct valuation, and stock performance during investment.
What’s Next?
There is hope for continued growth in drug exports. The Indian government is taking various initiatives to boost this sector. For example, the government is working to increase access to foreign markets and improve quality standards.
According to IBEF, the Indian pharma industry is growing rapidly. Looking at the numbers, it could surpass $130 billion by 2030. According to government figures, the current industry is worth nearly $50 billion, with over $25 billion coming from exports alone.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
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