Indian pharmaceutical market is the third largest in the world in terms of volume. The pharmaceutical sector has grown at 17 per cent and is expected to grow at around 15 per cent outperforming the global market to become the third largest pharmaceutical market in the world.
The government plans to invest $200 billion in infrastructure and the pool of scientists and engineers by 2024.India's filing of Drug Master Files with USFDA is the highest filed by any country in the world. India is the largest exporter of generic drugs with a share of about 20 per cent. Indian companies like Sun Pharma, Lupin and Dr Reddy have established a good market in the US with production plants in India. The market has increased from $6 billion in 2005 to $36.7 billion in 2016 and is expected to expand up to $ 55 billion by 2020.
100 per cent FDI is allowed under the automatic route for the pharmacy that plans to set up new production in India while 74 per cent FDI is allowed under automatic route for companies that purchase existing production facility to set up a new one and beyond that is under government approval. The government has reduced income tax rate for technical services from 25 per cent to 10 per cent for more technology inflow.
India's cost of production is significantly lower than that of the US and almost half of that of Europe which gives it a competitive edge to India. Reduction in approval time for new production facilities, the scope in the market and skilled employability are driving force behind attracting foreign companies.
Abbott, P&G, Pfizer, Glaxo Smith Kline, Johnson & Johnson and Astra Zeneca have set up their production plants in India. FDI inflow has risen to $2.5 billion per year. India is well on track to achieve its revenue target by 2020.
The fastest growing market in the world, India will depend on companies to shift their focus on chronic ailments considering lifestyle evolution and increasing healthcare concerns. Keeping a check on the price of drugs in consideration with the cost of R&D and passing the benefits of generic drugs to the patients will help a great deal in boosting domestic growth.
BW Reporters
The author is a correspondent with BW Businessworld with keen interest in HR and employee welfare.
