India Active Pharmaceutical Ingredients Market (By Type of Synthesis: Biotech, Synthetic; By Type of Manufacturer: Captive, Merchant; By Type; By Application; By Type of Drug) - Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The India active pharmaceutical ingredients market size was estimated at around USD 18.33 billion in 2023 and it is projected to hit around USD 38.63 billion by 2033, growing at a CAGR of 7.74% from 2024 to 2033.

Key Pointers

• By Type of Synthesis, the synthetic segment held the largest revenue share of 70% in 2023.
• By Type of Synthesis, the biotech API segment is poised for rapid growth during the forecast period.
• By Type of Manufacturer, the captive APIs segment registered the maximum market share of 51% in 2023.
• By Type of Manufacturer, the Merchant APIs segment is poised to witness the swiftest growth during the forecast period.
• By Type, the generic APIs generated the maximum market share of 57% in 2023.
• By Application, the cardiology segment held the largest revenue share of 22% in 2023.
• By Type of Drug, the Prescription segment generated the maximum market share of 80% in 2023.

India Active Pharmaceutical Ingredients Market Overview

The active pharmaceutical ingredients (API) market in India stands as a pivotal component of the pharmaceutical industry, reflecting the nation's significant contribution to global healthcare. With its robust infrastructure, skilled workforce, and adherence to international quality standards, India has emerged as a leading player in the API market, catering to both domestic and international demands.

India Active Pharmaceutical Ingredients Market Growth Factors

The growth of the active pharmaceutical ingredients (API) market in India is propelled an increasing demand for generic drugs, both domestically and globally, has significantly boosted the production and consumption of APIs in India. Additionally, the nation's robust healthcare infrastructure and skilled workforce contribute to its competitiveness in the global API market. Furthermore, favorable government policies and regulatory frameworks encourage investments in research and development, leading to technological advancements and innovation within the industry. Moreover, strategic collaborations between Indian pharmaceutical companies and international partners further stimulate market growth by facilitating access to new markets and technologies.

India Active Pharmaceutical Ingredients Market Trends:

• Focus on Quality: There's a growing emphasis on maintaining high-quality standards in API manufacturing. Indian companies are investing in technology, infrastructure, and research to ensure compliance with international regulatory standards such as those set by the US FDA and the European Medicines Agency.
• Expansion of Biopharmaceuticals: With the global pharmaceutical industry shifting towards biopharmaceuticals, Indian firms are increasingly investing in biotechnology and biosimilar production. This segment offers substantial growth opportunities due to its high barriers to entry and the potential for lucrative returns.
• Contract Manufacturing and Outsourcing: Many multinational pharmaceutical companies are outsourcing API manufacturing to Indian firms to leverage cost efficiencies and specialized expertise. This trend is expected to continue as companies seek to optimize their supply chains and focus on core competencies.
• Government Initiatives: The Indian government has launched various initiatives such as 'Make in India' and 'Pharma Vision 2020' to promote domestic manufacturing and innovation in the pharmaceutical sector. These initiatives aim to boost indigenous production, reduce dependency on imports, and strengthen India's position as a global API hub.
• Investment in Research and Development: Indian pharmaceutical companies are increasingly investing in research and development (R&D) to enhance their product portfolios and drive innovation. This includes investing in new drug discovery, process optimization, and formulation development to cater to evolving market needs.

India Active Pharmaceutical Ingredients Market Restraints:

• Quality Control Issues: Maintaining consistent quality across production batches remains a challenge for some Indian API manufacturers. Variations in manufacturing processes, raw material sourcing, and inadequate quality control measures can compromise product quality and safety, leading to recalls and reputational damage.
• Intellectual Property Rights (IPR) Concerns: The Indian pharmaceutical industry faces scrutiny regarding its intellectual property rights practices, particularly in the context of patent infringement and compulsory licensing. These concerns can deter foreign investment and collaboration, limiting access to advanced technologies and innovative therapies.
• Price Volatility of Raw Materials: Fluctuations in the prices of raw materials, such as key starting materials and intermediates, impact the cost of API production. Indian manufacturers may face challenges in managing production costs and maintaining competitiveness in the global market, especially when prices surge unpredictably.
• Dependency on Imports: Despite efforts to enhance domestic production capabilities, India still depends on imports for certain critical raw materials and advanced technologies. Reliance on imports exposes the industry to supply chain risks, geopolitical uncertainties, and currency fluctuations, affecting production continuity and cost competitiveness.
• Skill Shortages and Talent Retention: The pharmaceutical industry in India faces challenges related to skill shortages, particularly in areas such as research and development, quality assurance, and regulatory affairs. Retaining skilled talent amidst global competition and evolving market dynamics remains a priority for sustaining growth and innovation.

Type of Synthesis Insights

The synthetic segment dominated the market with a substantial revenue share of 70% in 2023. The primary driver for this segment is the soaring demand for generic drugs. APIs utilized in the production of generic drugs significantly contribute to the revenues of companies engaged in synthetic and chemical API manufacturing. This surge is creating vast opportunities for Contract Development and Manufacturing Organizations (CDMOs). Moreover, the increasing trend of outsourcing is aimed at enhancing profitability by lowering production costs, thus opening up new growth prospects for the market.

Meanwhile, the Biotech API segment is poised for rapid growth during the forecast period. This growth is fueled by escalating investments in the biopharmaceutical and biotechnology sectors, facilitating the innovation of novel molecules for treating diseases like cancer. Major companies are intensively focused on biotech APIs due to their substantial revenue potential and profitability. Noteworthy technological advancements in biotech API manufacturing include the utilization of single-use bioreactors, crafted from plastic and sterilized and sealed using gamma radiation.

Type of Manufacturer Insights

In 2023, the Captive APIs segment dominated the market, capturing a significant market share of 51%. Numerous companies are directing investments towards addressing challenges and devising new chemical methodologies for in-house API production. This strategy serves to reduce costs and mitigate the risk of contamination. Moreover, advancements in protein synthesis and artificial intelligence are anticipated to expedite development processes, offering enhanced control over the entire production cycle.

The Merchant APIs segment is poised to witness the swiftest growth during the forecast period. Within the pharmaceutical sector, there is a notable surge in contract manufacturing and outsourcing of API molecule development. Given the expensive nature of captive API production, companies are increasingly turning to outsourcing to minimize expenditures. Merchant APIs offer an attractive alternative by eliminating the need for hefty investments in costly equipment and sophisticated infrastructure.

Type Insights

In 2023, the Generic APIs segment asserted its dominance in the market, commanding a substantial revenue share of 57%. Moreover, this segment is poised to exhibit the fastest compound annual growth rate (CAGR). The expiration of patents for various branded molecules stands as a pivotal factor offering significant growth opportunities for generic API drugs. Post-pandemic, the pharmaceutical industry is approaching a patent cliff by 2030, with nearly 200 molecules losing exclusivity and over 100 biosimilars in development as of 2023. This scenario presents a lucrative opportunity for generic API manufacturers, as the demand for APIs of these products is expected to surge by the end of the decade. Notably, this includes over 60 molecules within the oncology segment, featuring complex high revenue-generating APIs.

Application Insights

In 2023, the cardiology segment emerged as the dominant force in the API market, capturing a notable revenue share of 22%. This achievement can be attributed to the escalating prevalence of cardiovascular diseases worldwide. Cardiovascular disease stands as one of the most pressing public health concerns globally, prompting extensive research endeavors into APIs within this therapeutic domain. Government initiatives, such as the National Cholesterol Education Program, are geared towards enhancing awareness regarding lipid and cholesterol-related disorders, thereby supporting medication-based interventions. With the high prevalence of cardiovascular diseases and the increasing awareness surrounding them, the segment is poised for robust growth over the forecast period, driving the demand for APIs used in cardiology drugs.

Meanwhile, the oncology segment is anticipated to witness the most rapid growth rate. The burgeoning prevalence of cancer serves as a primary driver for this market segment. Notably, the segment has witnessed the introduction of 15 novel therapeutics, thereby accelerating its growth trajectory. Additionally, there are over 1,000 clinical trials underway, focusing on molecules with significant commercial potential. With these launches and a robust pipeline, the demand for oncology APIs is expected to remain strong, fueling the segment's growth.

Type of Drug Insights

In 2023, the Prescription segment emerged as the dominant force in the market, commanding a significant revenue share of 80%. The uptake of prescription drugs is largely reliant on physicians' prescriptions, dictating their usage patterns. While the utilization of prescription drugs like Proton Pump Inhibitors (PPI) for managing common conditions such as heartburn has plateaued due to various adverse effects, the prescription rate of Histamine-2 Receptor Antagonists (H2RA) has been affected differently. Within the oncology segment, prescription drugs held sway, as cancer treatment predominantly involves chemotherapy, targeted therapy, immunotherapy, and hormonal therapy. Additionally, the utilization of biologics is on the rise. With the heightened efficacy of novel targeted therapies, the prescription rate for such therapies is rapidly escalating. Furthermore, major industry players are rolling out novel targeted therapies to meet growing demand.

Conversely, the Over-The-Counter (OTC) segment is poised to exhibit the swiftest growth over the forecast period. OTC products are easily accessible to the population and are frequently influenced by shifts in consumer behavior. There is a noticeable transition in consumer preferences, shifting from the use of antacids for heartburn towards ensuring gut health through the consumption of probiotics. This shift in paradigm is creating substantial opportunities for preventive products such as health supplements, nutraceuticals, and probiotics, while simultaneously impeding the growth of existing products.

India Active Pharmaceutical Ingredients Market Key companies

• Dr. Reddy’s Laboratories Ltd.
• Sun Pharmaceutical Industries Ltd.
• Teva Pharmaceutical Industries Ltd.
• Cipla Inc.
• AbbVie Inc.
• Aurobindo Pharma
• Sandoz International GmbH (Novartis AG)
• Viatris Inc.
• Fresenius Kabi AG
• STADA Arzneimittel AG
• Lonza
• Curia
• Pfizer Inc.
• Bristol-Myers Squibb Company
• Merck KGaA
• Catalent, Inc.

India Active Pharmaceutical Ingredients Market Segmentation:

By Type of Synthesis

• Biotech
  • Biotech APIs Market, By Type
    • Generic APIs
    • Innovative APIs
  • Biotech APIs Market, By Product
    • Monoclonal Antibodies
    • Hormones
    • Cytokines
    • Recombinant Proteins
    • Therapeutic Enzymes
    • Vaccines
    • Blood Factors
• Synthetic
  
  • By Synthetic APIs Market, By Type
    • Generic APIs
    • Innovative APIs

By Type of Manufacturer

• Captive APIs
• Merchant APIs

By Type

• Generic APIs
• Innovative APIs

By Application

• Cardiovascular Diseases
• Oncology
• CNS and Neurology
• Orthopedic
• Endocrinology
• Pulmonology
• Gastroenterology
• Nephrology
• Ophthalmology
• Others

By Type of Drug

• Prescription
• OTC