India’s pharmaceutical and medical device industry has been making significant strides globally, with a notable surge in exports to key markets such as the US, UK, and Italy. The country is now on the verge of surpassing its competitors to become the top exporter of medicines sold at retail in the US. This growing dominance in the pharmaceutical sector is not only a testament to India’s competitive edge but also highlights the efforts of the Indian government and industry players in tapping into international markets.
India’s Rise in US Pharmaceutical Exports
In recent years, India has steadily increased its presence in the US pharmaceutical market. As of 2023, it ranks as the third-largest supplier of medicines intended for retail sales in the United States, trailing only Ireland and Switzerland. However, the trend indicates that India is rapidly closing the gap and is poised to overtake these two countries in the near future.
India’s pharmaceutical exports to the US rose from $7.33 billion in 2022 to $9.08 billion in 2023, marking a significant year-over-year growth. This increase in exports boosted India’s share of the US retail medicine market from 10.08% in 2022 to 13.1% in 2023. In contrast, both Ireland and Switzerland, the top two exporters, saw a decline in their market shares. Ireland, the largest exporter, saw its share drop from 17.18% in 2022 to 13.85% in 2023, while Switzerland’s share fell from 17.4% to 13.7% during the same period.
This shift in market dynamics puts India within striking distance of becoming the top supplier of medicines for retail sale in the US. With all three countries—India, Ireland, and Switzerland—now selling around $9 billion worth of medicines to the US, the competition for the top spot has become fierce.
Expanding Global Footprint
India’s success is not limited to the US. The country has also made significant inroads into other key markets, including Italy and Germany. In Italy, India’s exports of antibiotics have grown substantially. In 2023, India ranked 10th among antibiotic exporters to Italy, increasing its market share from 0.96% in 2022 to 2.12% in 2023. In value terms, India’s antibiotic exports to Italy grew from $11.48 million in 2022 to $23.34 million in 2023, demonstrating its growing competitiveness in this critical segment.
Similarly, India has made notable progress in the German market for Magnetic Resonance Imaging (MRI) apparatus. Although still a relatively small player in this market, India has increased its share from 0.45% in 2022 to 1.7% in 2023. In value terms, India’s exports of MRI apparatus to Germany rose from $2.93 million in 2022 to $13.02 million in 2023. This growth has positioned India as the sixth-largest exporter of MRI equipment to Germany, with the UK leading the market at $460 million.
Driving Factors Behind India’s Success
Several factors contribute to India’s growing dominance in the global pharmaceutical and medical device markets. One of the key drivers has been the Indian government’s focus on boosting domestic manufacturing and exports in these sectors. The Production Linked Incentive (PLI) scheme, introduced by the Indian government, has provided much-needed support to the pharmaceutical and medical device industries. By offering financial incentives tied to production, the PLI scheme has encouraged companies to scale up manufacturing and enhance their global competitiveness.
Moreover, India’s cost-effective manufacturing capabilities have made it an attractive destination for pharmaceutical production. Indian pharmaceutical companies have long been known for their ability to produce high-quality generic drugs at a fraction of the cost compared to their Western counterparts. This cost advantage, combined with the country’s robust infrastructure and skilled workforce, has allowed India to establish itself as a leading exporter of medicines.
Another critical factor has been India’s ability to adapt to changing market demands. For instance, as countries around the world sought to strengthen their healthcare systems in response to the COVID-19 pandemic, India’s pharmaceutical industry was quick to ramp up production and supply essential medicines. This agility in responding to global needs has further solidified India’s position as a reliable supplier of pharmaceutical products.
The Path Ahead: Challenges and Opportunities
While India’s pharmaceutical industry has made impressive gains, several challenges remain on the path to becoming the top exporter of medicines to the US and other global markets. One of the most significant hurdles is the regulatory environment in many of these markets. For example, penetrating the European Union (EU) market can be particularly challenging due to stringent regulations and complex approval processes.
A senior official from India’s Ministry of Commerce and Industry highlighted the difficulties of entering the EU market, stating, “Penetrating the EU market is difficult, and it is important that we have a base coming in. These reflect some efforts which are being put in terms of monitoring various markets and various commodities to see where growth can be pushed.”
Despite these challenges, India’s pharmaceutical industry is well-positioned to continue its growth trajectory. The global demand for affordable, high-quality medicines is expected to rise in the coming years, driven by aging populations, the increasing prevalence of chronic diseases, and the need for cost-effective healthcare solutions. India’s established reputation as a reliable supplier of generic drugs and its expanding footprint in key markets make it a strong contender to meet this demand.