India’s active pharmaceutical ingredient (API) market, currently valued at about $15–16 billion, is expected to expand at a compound annual growth rate of 5–7% in fiscal years 2027 and 2028, as per a report by CareEdge Ratings. The growth is attributed to favorable government policies, a shift towards high-potency and complex APIs, increasing domestic demand, and deeper market penetration.
Pharmaceutical companies in India are transitioning from basic APIs to complex APIs to combat price erosion, enhance margins, and retain customers, the report highlighted. Despite a reliance on China for key starting materials, there is optimism due to government initiatives like Production-Linked Incentive-backed bulk drug parks showing progress.
The report also mentioned the development of a pipeline for high-potent and complex APIs, with commercialization expected in the near future, signifying India’s progression up the value chain. Significant growth resulting from this transition is anticipated within 2-4 years, with many projects yet to achieve commercialization and substantial production ramp-up.
Pritesh Rathi, Assistant Director at CareEdge Ratings, emphasized that long-term growth is anticipated from factors such as an aging population, improved healthcare access, increased insurance coverage, higher prevalence of chronic diseases, loss of exclusivity, and expansion into emerging markets. The next phase of API investments is expected to be shaped by government-backed bulk drug parks, with a majority of ongoing projects linked to this initiative.
