/ India’s Life Sciences Industry Set to Boom in the Near Future
The Life Sciences sector in India is at a crucial juncture, with rapid growth and an expanding scope of capabilities across the industry value chain.
The country is presently ranked 3rd in the Asia-Pacific region among the top 12 biotech destinations globally, thanks to the government’s support and initiatives. India’s biotech sector has been supported by a range of factors, starting from the development of the first state-level biotech policies to the inception of the country’s first structured life sciences cluster. The sector’s progress can be attributed to research and innovation, breakthrough drug development, significant investments to expedite drug launches, and medical advancements.
India’s pharmaceutical industry has seen exponential growth, bolstered by recent advancements in industrialisation and the adoption of digital technologies, which have revolutionised the sector and transformed the overall treatment paradigm. Companies are transforming in areas such as clinical data management, business intelligence, and analytical capabilities by adopting Digital Transformation, Artificial Intelligence, Machine Learning, Robotic Process Automation, and Telehealth Consultation.
This article delves into India’s Life Sciences Industry, highlighting its recent growth and the factors driving it towards an even brighter future.
Impact of Covid-19 on India’s Life Sciences Industry
The COVID-19 pandemic has brought the healthcare and pharmaceutical sectors into the spotlight, highlighting the importance of R&D and manufacturing of drugs and vaccines. India’s expertise in these areas allowed it to become a significant player in the global fight against the pandemic, catering to 62% of global vaccine demand.
However, the pandemic also had a negative impact on the industry, with disruptions in the supply chain and workforce shortages. Despite these challenges, market players adapted and implemented smart solutions to bridge the supply-demand gap, resulting in India exporting USD 24.62 billion worth of pharmaceutical products in FY22 to over 200 nations.
The pandemic has also spurred the adoption of digital advancements with a data-centric approach being implemented across all stages of work. The industry is also increasing investments in R&D to reduce risks due to global geopolitical issues and strive for self-reliance.
Growth Drivers of the Life Sciences Industry
- Growing pharmaceutical sector
The pharmaceutical industry in India is a significant player globally, ranking 3rd in production by volume and 14th by value. India is the largest provider of generic medicines globally, occupying 20% of the market share by volume and is the leading vaccine manufacturer with a 60% market share.
Despite COVID-19 disruptions, pharmaceutical exports have grown significantly from USD 15.4 billion in FY15 to USD 24.6 billion in FY22, with a year-on-year growth of 18%.
India’s domestic pharmaceutical market is expected to reach USD 130 billion by 2030. Additionally, foreign investments in the pharmaceutical sector have increased four-fold over the last five years, with cumulative FDI crossing the USD 20 billion mark in September 2022, supported by investor-friendly policies and a positive industry outlook.
- Skilled labour pool and lower manpower cost
India boasts of the world’s second-largest workforce in the pharmaceutical and biotech sectors, which has led to the emergence of over 4,237 biotech start-ups, with projections of this number reaching 10,000 by 2025.
This has made India an attractive destination for many companies to establish their research and development and manufacturing facilities, given that the cost of production in India is around 33% less than that of the United States. The country’s abundant skilled labour pool and lower manpower costs make it a potential hub for companies seeking to set up their R&D units.
- Government initiatives and measures boost the sector
The Indian government has been actively investing in the health and life sciences sector to boost the industry. In 2020, the government announced incentivization plans of at least USD 4.9 million over five years to encourage investment in medical device manufacturing, and in the Union Budget 2023-24, USD 11.96 billion was allocated for the pharmaceutical and healthcare sector.
Additionally, the Department of Biotechnology received USD 343.56 million for developing basic infrastructure, genetic engineering, technologies and bioinformatics, agriculture biotechnology, and training skilled professionals.
To strengthen the Pharmaceutical Industry (SPI) Scheme, a total financial outlay of USD 64.5 million for the period FY 21-22 to FY 25-26 was announced. The government also plans to spend over USD 200 billion on medical infrastructure by 2024 and increase public health spending to 2.5% of GDP by 2025.
The Production Linked Incentive (PLI) schemes were launched to spur manufacturing, with an initial investment of USD 1.83 billion in active pharmaceutical ingredients and key starting materials, followed by an additional investment of USD 2 billion in March 2021. The scheme is expected to generate an incremental sale of USD 37.09 billion in six years, starting from 2022-23 to 2027-28.
These initiatives are expected to strengthen the life sciences sector in India substantially in the next decade.
Emerging Trends Shaping the Life Sciences Industry in India
The life sciences industry in India is expected to be shaped by several trends in 2023, including the adoption of digital technologies, navigating regulatory changes and market volatility, and addressing health inequities. Embracing these trends through collaboration and industry convergence can unlock the industry’s full potential, from operational restructuring to increased use of digital solutions for diagnosis and treatment.
By prioritizing patient care and focusing on making a lasting impact on humanity, the industry can move beyond profit-driven success. As the industry becomes more data-driven and personalized, trust in new technologies and treatments will increase, further advancing human health.
Big Opportunities Ahead for India’s Life Sciences Industry
The growth of the life sciences industry in India is being driven by research, innovation, breakthrough drug development, and government initiatives.
To capitalise on emerging digital trends and advanced IT/healthtech applications, leaders should establish a vision for innovation and data-driven decision-making, prioritise data strategies and innovations, and capitalise on emerging technologies such as AI, NLP, RPA, AR/VR, and ML. Empowering data governance approaches can drive the adoption of changing technology trends and meet evolving business needs.
India’s Life Sciences industry is a major contributor to the country’s foreign trade and offers great investment potential. The industry is known for producing affordable generic medications and adhering to global manufacturing standards.
India currently leads the world in pharmaceutical production, with projected growth of 9-12% in medicine spending over the next five years. The Indian government has implemented several measures to reduce healthcare costs, including the National Health Protection Scheme, which offers universal healthcare, and the opening of pharmacies offering inexpensive medications.
Considering these progressing factors, we expect significant growth in the life sciences industry in India in the near future.
How Can M+V Altios Help?
With vast industry experience, M+V Altios is well-positioned to support life sciences companies in India to leverage new growth opportunities, navigate growth challenges, enhance value proposition and build a solid presence in the Indian market. Our services are tailored to the issues that life sciences companies in India face.
Get in touch with us today to know more about how we can help you to successfully do business in India.
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