Investment Opportunities in Pharmaceutical Industry of India

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Amongst all the countries that fall under the category of developing countries, Indian pharmaceutical industry is one of the biggest and the most advanced. This industry has been a boon to the Indian economy. It provides employment to a huge number of people and ensures that vital drugs are made available to the huge population of India at affordable rates.

The drugs and pharmaceutical industry plays a pivotal role in the economic development of India. Being a very intense knowledge-based industry, it offers innumerable business opportunities for investors worldwide. Indian pharmaceutical exports accounts for export to more than 200 countries around the world. The annual turnover of pharmaceutical products contributes to about US$ 17 billion. In recent times, the Indian pharmaceutical industry has shown tremendous growth in terms of infrastructure development, product usage, and technology.

The pharmaceutical industry in India provides several opportunities for investments and trade due to the following factors:

• With respect to India’s huge population it is an excellent center for clinical trials.

• India has efficient and cost-effective sources for getting a hold of generic drugs, especially the drugs that are going off their patents in the coming years.

• India has abundant manpower with strong scientific, technical knowledge.

• The cost involved for research and development is very low.

• The production cost of quality drugs in bulk quantities is very low.

• India houses excellent laboratories with world-class facilities. It has laboratories that specialize in process development and the development of cost-efficient drug manufacturing technology.

• India is self-reliant in terms of the production of bulk drugs. Almost 70% of the requirements for the formulation of drugs is available within the country itself.

• Another important factor that is responsible for attracting foreign investments in the Indian pharmaceutical sector is the increasing balance of trade in the pharma sector.

• India’s fast growing biotech industry, which offers great potential in the international market, also has contributed in making the pharma sector in India an attractive industry to make investments.

• Besides the presence of different systems of medicines, such as Siddha, Naturopahy, Ayurveda, Homeopathy apart from its strengths in manufacturing makes the Indian pharmaceutical industry an attractive industry to invest in.

Due to all these advantageous factors, India is recognized as one of the leading players in pharmaceuticals in the global market.

The Indian pharmaceutical industry got a major boost with the signing of the General Agreement on Tariffs and Trade in 2005. This agreement helped India to recognize global patents. After recognizing global patents, the Indian pharmaceutical market has become a sought-out destination for foreign players to invest in the sector. Also, investment in pharmaceutical industry has vastly increased over the years since the industrial licensing for a huge number of drugs and pharmaceutical products has been abolished.

The Department of Chemicals and Petrochemicals, which falls under the Ministry of Chemicals and Fertilizers, overlooks all the planning, developing, and regulating of the pharmaceutical industry in India. The ministry permits up to 100% foreign investment provided that the investor adheres to certain stipulations laid down by the government. The ministry allows for exemption from price control for a period of 15 years if the product is patented under the Indian Patent Act and is developed through indigenous R&D in the country.

Thus, with such remarkable initiative of the Indian government, the Indian prospective pharmaceutical industry looks extremely positive for attracting more foreign investments.

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