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John Wayne

Top 5 Policy Changes Required to Boost Indian Pharma Exports

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John Wayne, (2014, May 20). Top 5 Policy Changes Required to Boost Indian Pharma Exports. Psychreg on Lifestyle. https://www.psychreg.org/top-policy-changes-required-boost-indian-pharma-exports/
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From being a sector which was predominantly run by the MNCs, to becoming one of the most important centers in the world of pharma, the Indian pharmaceutical industry has come a long way. Yet it yearns for some immediate changes for its growth. 

But before getting into the discussion of the much needed changes, let us first understand the least basic statistical overview that the sector showcases. 

Basic statistical overview of Indian pharma

  • India is among the top 20 pharmaceutical exporting countries and has demonstrated remarkable performance in exports with continuous positive Balance of Trade (BoT). 
  • Indian drugs are exported to around 200 countries in the world, including the highly regulated markets like USA, Russia, Germany, Austria and UK with USA alone accounting for almost 25% of total export. 
  • Currently, the sector happens to draw around 50% of the total turnover, primarily from exports. 
  • The industry is ranked third globally in volume and 14th in terms of value, supplying around 10% of the total global production. This also amounts to around 20% of the total volume of global generics. 

Hence it would not be too wrong to say that every other generic drugs consumed anywhere in the world has some Indian origin, and all credit goes to the pharma manufacturers in India

Current demographics of Indian pharma  

From an extremely mere and negligible amount of turnover, to a whopping profit margin of more than Rs. 2 lakh crores at present, the Indian pharma has undisputedly grown beyond imaginations. 

  • According to Union Commerce Ministry, the exports of pharma sector for 2021-22 was $24.47 billion (which was around $24.44 billion in the preceding year), and remain in the 5th position with 5.86% of exports among the top 10 major commodity export from India. From being a gross importer of medicines till the early 1980’s, this sector, having more than 10,000 small, medium and big companies; is currently responsible for exporting affordable and quality medicines to more than 200 countries across the world, including the developed ones as already mentioned above. The biggest change for the sector was obviously the shift from being an MNC dominated one, to leading the global market with the domestic players making medicines accessible not just to patients within the country but also to the rest of the world. For example, the Indian pharmaceutical companies made available high quality, safe, efficacious and affordable drugs having the best effectivity against Africa’s dreaded diseases like malaria and AIDS. 
  • All of this became possible only because of the patent policies of the central government in the 70’s and 80’s which enabled Indian pharmaceutical industry not just to grow in size but reduce prices of life-saving drugs. 

Now that our overall basics are clear, let’s get into the problems and complexities that are being faced by the sector, and that need special attention on an urgent basis. 

Major setbacks faced by Indian pharma that need to be amended  

  • Increase in freight cost amid global turmoil of coronavirus pandemic  
  • Delay in inspections of Indian sites by US FDA 
  • Stringency of US drug regulator 
  • Revival of the Japan and Europe pharma biz during pandemic 
  • Low R&D investments in Indian pharma 
  • Lack of Policy based reforms, including an exclusive portfolio for pharma sector 

Complexity of 2020–2021

The exports of pharmaceuticals for the fiscal year 2021–22 registered a meager 0.13% growth compared to the preceding year, and missed the target as set by the government by a huge margin. 

It is quite interesting to notice that this happened when India’s overall merchandise exports saw around 43.18% increase to $417.81 billion as compared to that of $291.81 billion in the preceding fiscal year. 

The fiscal year 2020–21 saw an exceptional growth of 18.19% in exports, to $24.4 billion, a kind of growth that happened after eight years. 

Drugs and pharmaceuticals remained in the fifth position with 5.86% of the total exports among the top ten major commodity groups that are exported from the country. 

Changes required by Indian pharmaceutical industry to fight multiple gurdles  

Need of more FDI

  • The Covid pandemic has once again brought the Indian pharmaceutical and medical devices industries into limelight.
  • Though the industry has been witnessing a stellar performance during the last several years, the Foreign Direct Investment (FDI) into drugs and pharmaceutical industry in the country has seen a decline of 3.2% in the first nine months of the fiscal year 2021–22.
  • The FDI inflow into drugs and pharmaceuticals for the nine months ended December, 2021 stands at $1.21 billion, as compared to $1.25 billion in the same period of last year. 

Need more of smoother quicker approvals 

  • Another major setback to the sector that needs a speedy redressal is the US FDA approvals of Abbreviated New Drug Applications (ANDA); which remained lowest in the year 2021, mainly due to adverse worldwide impact of Covid.
  • The US FDA approved only 635 ANDA during 2021 as compared to 761 in the prior year. In the year 2017, US FDA approved 844 ANDAs and slowly started diminishing thereafter.
  • The R&D based Indian pharma majors secured 210 ANDA approvals from US FDA which worked out to 33% of total approvals.
  • In the last fiscal Indian companies received 276 ANDA approvals, 36.3% of total approvals.
  • The total tentative approvals were also declined to 116 as against 125 in 2020. 

Need more and more investments on R&D 

  • The R&D investments always play an important role in getting US FDA approvals. So, the Indian pharmaceutical industry should invest more and more in R&D to get more ANDA approvals from the US FDA.
  • Hence, the government should also immediately initiate steps to change its policies, including an exclusive central ministry for the sector, to take this promising sector into the next level.

Need to act as per changing international dynamics  

  • Multiple reasons like the freight cost increase and a decline in exports to the US owing to the pending regulatory inspections in Indian sites by the FDA, have impacted the pharmaceutical exports in the current fiscal year. Some warning letters issued by the US drug regulator also hampered the exports to the US market. 
  • Some pharma manufacturers in Japan and Europe also revived their business during the Covid period and started supplying to the US, that impacted the Indian exporters, including some of the major tadalafil manufacturers in India.
  • The regulatory cells in NIPERs and other institutes need to come forward in this regard. 

Need to strengthen CDSCO 

It needs no special mention that CDSCO needs to be strengthened and empowered both in terms of providing infrastructure support, capacity building etc. to address the growing challenges and demands of the pharmaceutical industry


John Wayne did his degree in psychology at the University of Hertfordshire. He is interested in mental health, wellness, and lifestyle.


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