This report profiles India’s pharmaceuticals and healthcare industry, discussing market trends through 2015 and outlook for 2016 and beyond. The report also highlights leading players in the sector including Dr Reddy’s Laboratories Ltd, Cipla Ltd and Lupin Ltd.

Over the last decade, the Indian pharmaceutical and healthcare sector has taken great strides. India’s pharmaceutical sector has achieved new heights as the world’s most cost effective generic drugs manufacturer. Many Indian pharmaceutical companies have maintained the highest standards in purity, stability and international safety, health and environmental protection during the production process as well as the supply of bulk drugs. Competing fiercely with other emerging markets such as Brazil and China, India has carved a niche for itself in becoming one of the leading generic pharmaceutical manufacturers in the world.

The domestic pharmaceutical market continued on its growth trend in 2015, growing by 12% y/y. However, pharmaceuticals export growth slowed down further in the year due to the Indian rupee depreciation. Exports grew by only 4% in 2015, after experiencing double-digit growth of 11% in 2014. Going forward, a revival is expected in the sector backed by government support and various macro growth drivers, including rise in per capita income; rise in health insurance penetration; proliferation of healthcare services across remote areas; rise in lifestyle diseases; increasing preference of India as a cost effective production centre; increase in foreign investments; and increase in government and private expenditure on health. However, frequent policy changes and rising prices of raw materials may act as deterrent for growth of this sector.

Key Points:

• According to the World Health Organization, the size of India’s healthcare industry was around USD 79bn as of 2013. Government accounted for around 32% of the total spending, while the private sector accounted for the remainder.

• India’s pharmaceutical sector was ranked among the top five globally in terms of production volume as of 2013. However, in value term, it was minuscule in size compared to the markets of the U.S. and Japan. Indian market accounted for only 2.5% of global pharmaceutical market as of 2014.

• Exports accounted for 42% of the total size of the pharmaceutical sector as of 2015. Pharmaceutical exports thus helped in containing the country’s trade deficit and added to its foreign exchange reserves.