top of page

Pharmacy of the World

Updated: Oct 9, 2023

India's Pharmaceutical Industry stands as a shining example of innovation & economic strength on the global stage, earning it the distinguished moniker "Pharmacy of the World." Within the realm of emerging economies, India has firmly established itself as a vibrant epicentre for cutting-edge pharmaceutical enterprises.

A graphic on India - Pharmacy of the World

Illustration by The Geostrata

Most recently, amidst the critical conditions of the global battle against the COVID-19 outbreak, the pharmaceutical industry worldwide encountered rampant shortages.

In stark contrast, India's exemplary management effectively met domestic demands while simultaneously launching "Vaccine Maitri," a program aimed at providing pharmaceuticals and humanitarian assistance to 96 countries, across the world.

India thereby reaffirmed its esteemed status as the "Pharmacy of the World," showcasing its formidable manufacturing and exporting prowess in the pharmaceutical sector. The nation has garnered international acclaim for its ability to supply products of impeccable quality, aligning with global standards, all while maintaining price competitiveness.


In 1969, Indian pharma companies had a small share of 5% in the domestic market whereas currently, they hold over 90% of the domestic market and globally 60% of vaccines exported are of Indian origin. However, India hadn't always been regarded as the pharmacy of the world. During the 1950s and 1960s, even in India, Western Multinational Pharma giants had monopolised the drug market. Domestic drug prices were amongst the highest in the world and India had strict patent laws which gave the monopoly of prosperity to Big Pharma Companies.

Dr Yusuf Hamied (Chairperson of Cipla) started the opposition against the monopolisation by pharma giants. He, coupled with other Indian pharma companies, requested the Government of India to change Indian patent Laws. As a result, The Patents Act 1970 was passed which relaxed patent provisions in India and began the process of revitalising the Indian Pharma Industry. The New Act allowed Indian pharma companies to make low-cost generic versions of critical life-saving drugs.

Other government regulations such as; the Foreign Exchange Regulation Act of 1973, Regulation Policies, Ratio Parameters, and Drug Policy of 1978 and 1986 also played an important role and guaranteed the availability of affordable medicines to people in need and encouraged the development of the Indian pharmaceutical industry.

By the mid-1990s, India became a major exporter of formulations. During 1988 and 1995, India was a major exporter of Bulk Drugs too.

Further, with the liberalization restructuring of the Pharmaceutical Industry, the majority of reforms were brought in. The 1990s witnessed significant changes in the Pharmaceutical sector with the introduction of trade liberalization measures. All those drugs that were reserved for domestic production by the public sector were delicensed in two stages.


In 1999, the WHO declared that HIV/AIDS is the leading cause of death in the African continent. When multinational pharma companies were charging $ 10,000 per year for one person for the HIV drug, Indian companies with the help of reverse engineering brought down the cost by 99.99%, saving thousands of human lives.

Currently, India is the leading supplier of affordable HIV drugs globally owing to its ability to quickly produce newer HIV medications as generics.

A generic drug is a prescription medication that is identical to a branded drug in dosage form, safety, strength, and performance characteristics and functions similarly to a brand-name drug with the same clinical benefit.

Due to India's large number of generic drug producers and with the help of reverse engineering, there has been a price reduction of over 99% for drugs across a range of therapeutic areas, including tuberculosis, malaria, HIV/AIDS, and hepatitis C. Reverse Engineering in the pharmaceutical industry is a complex process of deconstructing a drug in a lab to identify, count, and characterise each of its constituent parts and come up with its generic version. India has strengthened its soft power and influence in Africa and other developing nations through drug diplomacy by providing affordable medications and saving thousands of human lives.


In terms of sheer volume, India ranks as the third-largest contributor to the global pharmaceutical landscape, wielding substantial influence on both the domestic economy and the worldwide healthcare arena.

The Indian pharmaceutical sector encompasses critical segments such as over-the-counter (OTC) medications, generics, active pharmaceutical ingredients (APIs), vaccines, biosimilars, and custom research manufacturing (CRM).

Currently, this robust pharmaceutical industry constitutes a noteworthy 1.72% of the nation's GDP, ranking as the world's 14th largest by valuation.

Recent findings from an EY FICCI report indicate that a consensus is emerging to provide innovative therapies to patients, propelling the Indian pharmaceutical market to an estimated value of USD 130 Billion by the close of 2030. Simultaneously, the global pharmaceutical products market is anticipated to exceed the monumental USD1 Trillion threshold by 2023.

Financial Year

Turnover (INR in Crore)

Growth Rate

















As Prime Minister Narendra Modi remarked, "Our definition of wellness is not limited by physical boundaries." The same applies to global trade as well.

Today, the world stands at the stalwart of Globalization, interlinked in supply chain networking. A supply chain in the pharmaceutical industry can be referred to as the interconnected network of organizations, resources, and activities involved in the production and distribution of pharmaceutical products. It encompasses various stages, from the procurement of raw materials and active pharmaceutical ingredients (APIs) to manufacturing, packaging, distribution, and finally, delivering drugs to end-users, which can be hospitals, pharmacies, or patients.

For a nation to be pharmaceutical self-reliant, the Indigenous Production of Active Pharmaceutical Ingredients (APIs) needs to be scaled up to a level where the production is economically viable, internally.

However, since the establishment of the Indian Pharmaceutical Industry (IPI), the reports indicate from 1988 to 2020 a hyperbolic growth of APIs total Imports from USD 1.99 Million to USD 1561.87 Million. This is the level of dependency in a sector, where India presumes to be self-reliant.

India remains resilient in terms of formulated drugs but it's primarily the dependence in the APIs sector that is the issue. Now, in this globalised world with worldwide supply chains, one can argue that there is no harm in dependence on other nations. Furthermore, in a global supply chain, raw materials and products are procured from a nation which is at a comparative advantage over the other and thus countries profit from international trade. However, a supply chain can only be sustained until the partner is reliable but in the case of APIs, India is highly dependent on the People's Republic of China and India-China ties have been in an 'abnormal state' since the Galwan Valley clash.


The IPI was largely awaiting a transformation, and the COVID-19 outbreak acted as an agent calling for immediate actions, as the disrupted supply chains turned the whole world vulnerable. Therefore, working on the vision of reducing import dependency through indigenous production, “Production Linked Incentive Scheme for Pharmaceuticals” was announced in March 2021. In the first phase, the scheme had an outlay for 41 critical bulk drugs with massive funds of INR 6940 Cr.

During the 2000s and thereafter various committees were constituted to discuss the domestic manufacture of active pharmaceutical ingredients. One such was the Katoch Committee headed by Dr. V.K. Katoch, the then Secretary of the Department of Health Research.

Here are some of the recommendations made by the committee, that can benefit India in combating the risks:

  1. Establishment of Large Manufacturing Zones/ Mega Parks for API economic production.

  2. Establishing six large API intermediate clusters is expected to transform the nation.

  3. Revival of public sector units for essential critical drug manufacturing, by infusion of capital to begin with.

  4. Single window clearance mechanism to synergise the process.

  5. Strong industry-academia interaction.

Following this, in pursuit of protecting the domestic bulk drug manufacturers, increasing tariff rates to bound levels can be a significant step, without violating India’s obligations under WTO. Because, with increased tariffs, the Indian-formulated drug manufacturers will be bound to purchase bulk drugs domestically.

The PLI scheme for Bulk Drugs sought to boost the domestic production of 41 select critical bulk drugs. India can put a blanket ban on the import of these listed drugs.

Not essentially to cut down the Chinese over-dependence, but to promote indigenous products. This can be carried out by implementing a phased strategy similar to that of the Indian MoD Positive Indigenisation List (PIL). There’s also a need for a government initiative to revive the public sector, which was shattered following the 1990 restructuring. As the Draft Policy to Catalyze Research & Development and Innovation in the Pharma-MedTech Sector in India discusses there is an active need for commitment to encourage Research & Development (R&D) in pharmaceuticals. MSMEs with a key contribution of 50% of pharmaceutical exports are the drivers of IPI, empowering this future potential segment will also deliver long-term benefits.




Recent Posts

See All


bottom of page