The India active pharmaceutical ingredients market is a crucial sub-sector within the pharmaceutical industry due to APIs being the core components of any drug. APIs are used widely across several therapeutic applications including anti-infective, cardiovascular, CNS, respiratory, oncology, gastrointestinal, musculoskeletal, genito-urinary, and others. APIs ensure high efficacy and consistency of drug performance.

The India Active Pharmaceutical Ingredients Market Size is estimated to be valued at US$ 27014.17 Bn  in 2024 and is expected to exhibit a CAGR of 21% over the forecast period from 2024 to 2031.

Key Takeaways

Key players operating in the India active pharmaceutical ingredients market are AVL, Cummins, Inc, Johnson Matthey Battery Systems, L&T Technology Services, Merlin Equipment Ltd., Navitas System, LLC, Nuvation Engineering, The Ventec Company, Toshiba Corporation, TWS (Technology with Spirit), Vecture Inc.

The growing demand for generic drugs to reduce healthcare costs is supporting the demand for APIs in India. Several leading pharmaceutical companies are expanding their API manufacturing capabilities in India to cater to the domestic as well as international markets.

Rising investments and partnerships in the pharmaceutical industry are supporting the global expansion of the India API market. Major international pharmaceutical companies are outsourcing API production to India to leverage its large low-cost skilled workforce.

Market Drivers

The strong growth of the Indian pharmaceutical industry is a major factor driving the demand for APIs. India's pharmaceutical exports have increased significantly over the last few years making it a leading exporter of generic drugs globally. Further, the growing geriatric population and prevalence of chronic diseases have increased the demand for drugs, thereby augmenting the need for API production in India. Government policies supporting the pharmaceutical sector through incentives and relaxed regulations are also fueling the Indian APIs market growth.

Impact of geopolitical situation on India Active Pharmaceutical Ingredients Market growth

The geopolitical tensions between India and neighboring China have impacted the growth of India's API market. India is heavily dependent on China for its supply of APIs and key starting materials. However, due to ongoing border disputes and trade restrictions imposed by both sides in recent years, India is now promoting self-reliance and driving local manufacturing of APIs. Several policy changes and production-linked incentive schemes have been rolled out to incentivize domestic API production as well as attract foreign manufacturers to set up facilities in India. This is boosting the growth of the local industry. However, global supply chain disruptions caused by the pandemic and ongoing conflict between Russia-Ukraine have also disrupted API supplies from China and other regions. The fluctuating prices of raw materials and rise in logistics costs pose challenges for the industry. Going forward, it will be important for Indian API producers to diversify sourcing, develop alternative supply routes and build strategic partnerships to reduce dependence on any single supplier or region. Geographical regions with concentration of India's Active Pharmaceutical Ingredients Market value

The Indian states of Gujarat, Himachal Pradesh, Maharashtra and Andhra Pradesh account for a major share of the country's total API production in terms of value. This is because these states have traditionally been pharmaceutical hubs with a large number of API manufacturers based out of cities like Ahmedabad, Vapi, Visakhapatnam etc. Favorable business policies, availability of infrastructure and access to ports have attracted API makers to set up facilities in these regions over decades. Even today, more than 50% of the country's total API production is concentrated across these four states.

Fastest growing region for India's Active Pharmaceutical Ingredients Market

The state of Telangana has emerged as the fastest growing region for India's API industry in recent years. Various initiatives of the state government like pharma city projects, incentive schemes and ecosystem support are attracting significant investments from domestic as well as international API companies to establish facilities in Telangana. The presence of a dedicated life sciences university in Hyderabad as well as a large, skilled workforce pool are further boosting the growth of API production in this region. It is projected that in the forecast period between 2024 to 2031, Telangana will witness an annual growth rate of over 25% for its API industry and will likely compete with the traditional pharmaceutical hubs to be among the top states contributing to India's API production.

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