India’s pharmaceutical industry will need to move from a volume-led approach to a model driven by value, innovation and stronger collaboration across the ecosystem if it is to achieve its projected value of USD 450 billion by 2047, according to a new report by EY Parthenon and the Organisation of Pharmaceutical Producers of India (OPPI). 

The report comes  comes as India targets a USD 30–35 trillion economy by 2047, positioning the pharmaceutical sector as a key driver of both economic growth and public health. It identifies three interlinked pillars defining India's pharma industry: dominance in generics and vaccines, the advancing CRDMO/CDMO sector, and the expansion of Global Capability Centres (GCCs).

Titled "Fueling innovation, advancing equity: The power of partnerships and digital-first strategies driving Indian pharma's global dominance”, the report highlights the transformative journey of India's pharmaceutical sector as it evolves from its historical role as the "pharmacy of the world" to a global leader in innovation and scientific research.

It includes insights from CXO interactions, which underscore the need for the industry to prioritise long-term global leadership and shift from a cost-driven approach to one centred on innovation and value creation. Leaders also emphasised the importance of regulatory agility, greater R&D investment, and talent development as critical areas for fostering a robust pharmaceutical ecosystem.

Suresh Subramanian, National Lifesciences Leader, EY Parthenon India, said the sector remains a “stellar success story” but must now address critical gaps.

“While we have established ourselves as a global leader in generics and vaccines, we face challenges in transitioning to high-value innovation and advanced therapeutics. Key areas such as regulatory ease, investment in next-generation therapies, and the development of a skilled workforce require urgent attention. Our report shows a clear path forward, powered by strategic partnerships, digital acceleration, and policy enablers that can help India evolve from a manufacturing hub to a global life sciences innovation powerhouse,” he added.

Echoing this view, Anil Matai, Director General of OPPI, said India’s pharma industry stands at “a pivotal moment” with the potential to redefine its global identity through innovation and collaboration.

“By focusing on high-value opportunities, enhancing regulatory frameworks, and fostering partnerships among stakeholders, India can solidify its position as a leader in pharmaceutical innovation and advanced manufacturing by 2047. The collective efforts of industry, government, and academia will be essential in realising this vision, ensuring that India not only meets its ambitious economic goals but also contributes significantly to global health and well-being,” he noted.

Key takeaways from the report

Current Landscape: According to the report, the Indian pharma industry ranks third globally in volume and fourteenth in value, accounting for approximately 20 percent of the global supply of generic drugs and 60 percent of global vaccines. It reveals that pharmaceutical exports have surged from USD 15.07 billion in 2013-14 to USD 27.85 billion in FY 2023-24, with projections to exceed USD 30 billion soon.

Rise of CRDMOs: The report emphasises the emergence of CRDMOs and CDMOs as pivotal players in the pharmaceutical landscape. It finds that Indian CRDMOs are investing heavily in advanced manufacturing and analytics, positioning themselves as key partners in global research and development.

Expansion of GCCs: Approximately 50 percent of leading global life sciences companies have set up GCCs in India, leveraging local talent and advanced digital capabilities. The report highlights that the integration of artificial intelligence, advanced analytics, and automation within GCCs is redefining drug discovery and development processes, positioning India as a global knowledge and innovation engine.

Critical gaps: The report captures a unanimous view from industry leaders, who express that the traditional generics model is becoming increasingly unsustainable due to price erosion and rising costs. They emphasise a pressing need to ‘upscale India's knowledge potential’ and build a ‘world-class R&D ecosystem.’ A key insight from these conversations is that ‘partnerships follow predictability,’ underscoring the critical need for strong intellectual property protection and regulatory clarity to attract the early-phase research that fuels true innovation.

A roadmap for global leadership  

The report proposes a three-pronged strategy to unlock India’s USD 450 billion potential:

Regulatory agility and policy leadership: Align Indian GMP standards with global benchmarks, participate actively in international forums, and create a CRDMO-specific regulatory pathway with Regulatory Data Protection (RDP) to enable early-phase trials and co-development.

• R&D investment and innovation financing: Drive high-risk research through public–private innovation funds for biologics, cell, and gene therapies. The report urges pharma companies to raise R&D spend beyond 10 percent of revenues and build co-innovation labs with academia and startups to bridge discovery and commercialization.
• Talent and capability development: Modernise academic curricula with AI/ML, bioinformatics, and regulatory science. Encourage collaboration between industry, CRDMOs, and GCCs to design job-ready programmes, and link research grants to tangible outcomes such as IND filings.