India Active Pharmaceutical Ingredients Market (2024 - 2030)

India API Market Size & Trends

The India active pharmaceutical ingredients market size was estimated at USD 18.29 billion in 2023 and is expected to grow at a CAGR of 7.7% from 2024 to 2030. The market has experienced substantial growth due to the rising burden of chronic diseases, increasing geriatric population, and the consistent demand for cost-effective medications.

Increasing prevalence of infectious diseases and hospital-acquired infections is driving market growth. Furthermore, an increase in the prevalence of chronic diseases, such as cardiovascular diseases and cancer, is anticipated to boost the market over the forecast period. According to a recent research report on noncommunicable diseases in India by Thought Arbitrage Research Institute (TARI) the incidence of chronic diseases in India as of 2021 is 116 per 1000 people out of which two third of individuals affected by chronic disorders are between 26-59 years of age.

Key companies are focusing on expanding their presence across various regions. For instance, in June 2022, Piramal Pharma Solutions invested USD 30 million for expanding its capabilities in Telangana, India. This initiative is expected to increase active pharmaceutical ingredients (API) manufacturing capacity and support drug development. Furthermore, in November 2022, Aurobindo Pharma planned to complete Penicillin G plant approved under the PLI scheme by 2024, with investment of USD 2,000 million to ensure and promote domestic manufacturing of API by increasing the production capacity to 15,000 tons annually.

Market Concentration & Characteristics

The market growth stage is medium and pace of the market growth is accelerating.

India has the largest population of vegetarians, among other countries in the world. According to World Atlas, 38% people in India are vegetarian. Resultantly, the adoption of plant-based APIs is expected to create lucrative opportunity for API companies to capitalize on the growing demand for ethical, sustainable, and cruelty-free drugs. Plant-based APIs offer various advantages over their synthetic counterparts, including improved safety, effectiveness, and sustainability. The shift toward the use of vegetarian and vegan products has significant momentum as numerous customers opt for plant-based products.

India active pharmaceutical ingredients market is witnessing an increasing number of merger & acquisition (M&A) activities that are being undertaken by the prominent players. Several Indian medical imaging companies are adopting these strategies to upgrade their portfolio. For instance, in June 2022, Dr. Reddy’s Laboratories Ltd. acquired Eton pharma’s injectable product portfolio.

The Central Drugs Standard Control Organization (CDSCO) working under Directorate General of Health Services, Ministry of Health & Family Welfare, and Government of India is the authoritative agency that grants regulatory approvals for pharmaceuticals in India. An approval is granted under Drugs and Cosmetic Act 1940 and Rules 1945 for import, export, and manufacture of APIs in the country. Various amendments in the act such as Drugs Price Control Order 1995 and Research and Development Cess Act 1986 also regulate APIs. Another equally responsible authority for API is National Pharmaceuticals Pricing Authority.

Companies are devising innovative product development strategies and focusing on expanding their regional business footprints, which is driving the product demand. Advancements in drugs and launch of novel biologics have created opportunities for API manufacturers to update their technologies to meet the needs of consumers at the earliest. Fast-movers in technology are expected to gain a higher market share owing to stringent quality requirements for novel biologics.

Prominent active pharmaceutical ingredients companies in India, including Sun Pharmaceutical Industries Ltd, Cipla Inc., and Dr. Reddy’s Laboratories Ltd. among others have a significant presence in the country. However, they are also focusing on their expansion in the other countries in Europe and North America. For instance, in May 2022, Piramal Pharma established a new API plant in Aurora, Ontario, with a manufacturing site of more than 10,000 square feet.

Type Of Synthesis Insights

The synthetic segment held the largest revenue share of 69.7% in 2023. Major driver for synthetic API market is high demand for generic drugs. APIs used to develop generic drugs contribute to high revenue for synthetic and chemical API manufacturing companies. This is creating a wide opportunity for CDMOs. An increase in outsourcing trend for improving profitability by reducing the cost of production is creating new growth avenues for the market.

Biotech API is expected to witness fastest growth during the forecast period. Growth of biotech API segment can be attributed to rising investments in biopharmaceutical and biotechnology sectors. This allows innovation of new molecules that aid in treating diseases such as cancer. Key companies are highly focused on biotech APIs owing to high revenue generation and profitability. Some of the technological advancements in biotech API manufacturing include single-use bioreactors, which are made of plastic and have been sterilized and sealed with gamma radiation.

Type Of Manufacturer Insights

Captive APIs segment held the largest market share of 50.03% in 2023. Numerous companies are investing in solving challenges and developing new chemical ways for in-house production of APIs. This aids in reducing costs and risk of contamination. Protein synthesis and artificial intelligence are expected to accelerate development with greater control over the process.

The merchant APIs segment is anticipated to grow at the fastest growth over the forecast period. Contract manufacturing and outsourcing of API molecule development are growing trends in pharmaceutical sector. As captive production of APIs is expensive, companies have started opting for outsourcing to minimize expenses. Merchant APIs eliminate the need for investing in expensive equipment and sophisticated infrastructure.

Type Insights

Generic APIs segment dominated market with a revenue share of 56.8% in 2023. Furthermore, it the segment is also anticipated to grow at the fastest CAGR. Expiry of patent of various branded molecules is a key factor that offer high opportunity for growth of generic API drugs. Post pandemic, pharmaceutical industry is nearing a patent cliff by 2030, with nearly 200 molecules losing exclusivity and over 100 biosimilars developing as of 2023. This creates an opportunity for generic API manufacturers as the demand for the API of these products is set to rise by the end of this decade. This includes over 60 molecules that belong to the oncology segment with complex high revenue generating API’s.

Application Insights

The cardiology segment dominated the API market with a revenue share of 21.2% in 2023 attributable to rising prevalence of cardiovascular diseases. Cardiovascular disease is one of the world's most serious public health problems, prompting extensive research into APIs in the field. Government initiatives, such as National Cholesterol Education Program, are aimed at raising awareness related to lipid and cholesterol-related diseases. These programs also support medication-based awareness. High prevalence and increasing awareness about cardiovascular diseases are anticipated to boost segment growth over the forecast period, driving the demand for APIs for cardiology drugs.

The oncology segment is anticipated to grow at the fastest growth rate. Increasing prevalence of cancer is a key factor driving this market. This segment has witnessed the launch of 15 novel therapeutics, accelerating its growth. There are over 1,000 clinical trials with understudied molecules and strong commercial potential. These launches and a strong pipeline are anticipated to facilitate the strong demand for oncology APIs.

Type Of Drug Insights

Prescription dominated the market with a revenue share of 78.2% in 2023. The uptake of prescription drugs is largely dependent on physicians’ prescriptions. Use of prescription drugs, such as Proton Pump Inhibitors (PPI), in the management of general conditions, heartburn, has plateaued owing to several adverse effects. However, Histamine-2 Receptor Antagonist (H2RA) prescription rate has been impacted. Prescription drugs dominated in oncology segment as cancer is primarily treated using chemotherapy, targeted therapy, immunotherapy, and hormonal therapy. The use of biology is also increasing.Due to the increased efficacy of novel targeted therapies, the number of prescriptions for targeted therapies is rapidly increasing. Furthermore, major players are launching novel targeted therapies.

OTC segment is expected to depict the fastest growth over the forecast period. OTC products are easily accessible to the population and is frequently impacted by changes in consumer behavior. Consumer preference is shifting from use of antacids for heartburn to ensuring gut health by taking probiotics. This paradigm shift is creating greater opportunities for preventive products, such as health supplements, nutraceuticals, and probiotics, while slashing the growth of existing products.

Key India Active Pharmaceutical Ingredients Company Insights

Sun Pharmaceutical Industries Ltd, Cipla Inc., and Dr. Reddy’s Laboratories Ltd. are some of the key players in the market. Pharmaceutical companies are planning to diversify their API supply chain to various countries instead of focusing on one supplier to gain a competitive edge. Moreover, backward integration is becoming one of the common factors responsible for changing market scenarios, along with rising API prices.

• In April 2023, Mankind announced setting up a new factory in Udaipur, India, for the end-to-end manufacturing of synthetic hormone dydrogesterone, with an investment of USD 36.04 million.

• In June 2022, Piramal Pharma invested USD 30 million for expanding its capabilities in Telangana.

• In July 2022, Dr. Reddy’s Laboratories Ltd. announced the launch of Fesoterodine Fumarate extended-release tablets, following its FDA approval.

India Active Pharmaceutical Ingredients Market