Indian pharma sector sees growth at 8% CAGR, export rates spike by 9% in 2024: Report

The Indian pharma sector has grown at 8 per cent CAGR and has also seen a 9 per cent increase in export rates in 2024, according to a report. The report by McKinsey & Company showed that the pharma sector in the country is witnessing rapid production growth. Expanding its capabilities in APIs and biotechnology, it has grown at 8 per cent CAGR, twice the global average.

The country also emerged as the world's largest supplier of generic medicines, with a 9 per cent pharma export growth rate, nearly double the global average, the report said.

Currently, India meets 20 per cent of global demand. This includes over 40 per cent of generic medicines being supplied to the US, and 25 per cent to the UK. The country also supplies over 60 per cent of the world's vaccines and 70 per cent of global antiretroviral drugs for HIV treatment.

Further the report showed that India is also marching ahead in terms of emerging modalities like mRNA, cell and gene therapies, and antibodies. These are witnessing a growth at 13-14 per cent CAGR, surpassing conventional drug growth.

Notably, the pharma sector in India has seen an increase in the number of US Food and Drug Administration (USFDA) registered generic manufacturing sites. In 2024, India had a network of 752 FDA-approved, 2,050 WHO GMP-certified, and 286 EDQM-approved plants.

There has been a sharp improvement in compliance outcomes over the last several years. The incidences of 'official action indicated' (OAI) after USFDA inspections dropped by 50 per cent between 2013-14 and 2023-24.

The pharma sector has also seen a surge in green manufacturing initiatives, with 10 of India's top 20 pharma companies pledging for over 30 per cent emissions reduction by 2030.

Despite these progresses the industry faces critical challenges as it reaches a tipping point. 

Disruptions such as digital transformation, smart automation, and the rise of new treatment modalities could reshape pharmaceutical operations. Geopolitical shifts, nearshoring trends, and increasing sustainability demands also pose potential risks, the report said.

“India's pharmaceutical industry stands strong today because of what it has built over the last decade,” said Vishnukaant Pitty, Partner, McKinsey & Company.

“With disruptions on the horizon, it is crucial for the industry to embrace these strategic themes and fundamentally transform operating model to unlock a high-performance future,” he added.