India Active Pharmaceutical Ingredients (API) Market Size

Active Pharmaceutical Ingredients Market Analysis

The India Active Pharmaceutical Ingredients Market size is estimated at USD 13.64 billion in 2024, and is expected to reach USD 20.32 billion by 2029, growing at a CAGR of 8.31% during the forecast period (2024-2029).

The COVID-19 pandemic not only impacted the entire pharmaceutical supply chain but also disrupted the supply of APIs from China. This led to an increase in the cost of many prescription medications and the shortage of essential drugs in the country. As per an article published in November 2020, due to the pandemic outbreak, supplies of raw materials from China to produce medications for treating chronic diseases, such as HIV, cancer, epilepsy, and malaria, and even commonly used antibiotics and vitamin pills were affected. This led to a shortage of drugs, especially in the cardiovascular and antibiotic categories. However, the government initiatives to increase the production of active pharmaceutical ingredients have positively impacted market growth. For instance, in June 2020, the Indian government readied INR 10,000 crore (USD 100 billion) in schemes to boost the domestic production of APIs. The scheme entails providing production-linked incentives (PLIs) worth 6,490 crores (approximately USD 65 billion) to companies that invest in domestic manufacturing of critical key starting materials (KSM), which require active pharmaceutical ingredients (APIs), for drugs used to treat diabetes, tuberculosis, steroids, and antibiotics. This is expected to increase the market growth over the forecast period.

Other factors boosting the market growth include the increasing prevalence of infectious, genetic, cardiovascular, and other chronic disorders, the growing geriatric population, expanding adoption of biologics and biosimilars, and the rising production of generic drugs in the country.

The Indian pharmaceutical industry is the world's third-largest drug producer by volume. India operates over 250 facilities approved by the USFDA and UKMHRA and provides generic pharmaceuticals at affordable prices to millions of people worldwide.

The rising burden of infectious, genetic, and other chronic diseases such as cancer, diabetes, and neurological disorders is the key factor driving the market growth. For instance, as per the 2022 statistics published by IDF, about 74 million people had diabetes in 2021 in India, and this number is estimated to reach 92.9 million by 2030. Thus, the high diabetic population in the country raises the company's focus on developing advanced and safe drugs that require a large amount of API, propelling the market growth.

The growing geriatric population is more prone to develop chronic diseases, such as cardiovascular and neurological diseases, arthritis, etc., due to weak immunity. Aging affects many cellular processes predisposing to neurodegeneration, which is anticipated to increase market growth. For a study published in May 2021, about 18,896 people were screened for Parkinson's disease. The overall pervasiveness of the disease was almost 42.3 per 100,000. According to the same source, the prevalence over the age of 60 was 308.9 per 100,000, reflecting the trend of increasing disease predominance. Hence, the high burden of Parkinson's disorders among the elderly is anticipated to increase the demand for various therapeutic drugs and treatments. This is expected to boost the demand for APIs over market growth.

The increasing adoption of biosimilars and biologic drugs and rising company initiatives are expected to increase market growth. For instance, in October 2022, Biocon Biologics entered into a strategic out-licensing agreement with Yoshindo, a Japanese pharmaceutical company, to commercialize two of its pipeline biosimilar assets, Ustekinumab and Denosumab, in Japan. Also, in May 2022, Biocon biologic and Viatris launched bevacizumab (Abevmy), a biosimilar of Avastin (Roche), to treat various cancer in Canada.

Furthermore, the government of India is taking initiatives to boost API products in the market, which will benefit market growth. For instance, as per the India Brand Equity Foundation (IBEF), in January 2021, the Central government announced to set up of three bulk drug parks for INR 14,300 crores (USD 1,957 million) to manufacture chemical compounds or active pharmaceutical ingredients (APIs) for medicines and reduce imports from China. Also, in June 2021, the Finance Minister of India announced an additional outlay of INR 197,000 crores (USD 26,578.3 million) that will be utilized over five years for the pharmaceutical PLI scheme in 13 key sectors, such as active pharmaceutical ingredients, drug intermediaries, and key starting materials.

Moreover, the increasing company's focus on adopting various business strategies, such as collaboration, agreement, and others, and rising generic drug production in the country contribute to market growth. For instance, in January 2022, Alembic Pharmaceuticals received USFDA approval for its generic Entacapone tablets for treating patients with Parkinson's disease. The drug is available in the strength of 200mg as well. As of March 2021, Piramal Pharma Solution acquired a 100% stake in Hemmo Pharmaceuticals Pvt. for INR 775 crores (approx USD 85 million). This acquisition signals PPS' entry into the development and production of peptide APIs. This competency complements PPS' current service offering as it continues to grow and expand its capabilities and position as a top CDMO.

Therefore, owing to the aforementioned factors, the studied market is expected to grow over the forecast period. However, the stringent regulations for drug approvals, various drug price policies in the country, and high competition among API manufacturers are expected to hinder India's active pharmaceutical ingredient market growth over the forecast period.