Pharma exports grow as industry shifts from mass generics to high-value products

India’s pharmaceutical industry, widely regarded as the “pharmacy of the world”, is undergoing a significant transformation as it shifts from a volume-driven model to a value-driven approach, according to the Economic Survey 2025-26. The change reflects the sector’s growing focus on complex generics, biosimilars, innovation and high-end medical technologies in an effort to move up the global value chain.

India is currently the world’s third-largest pharmaceutical producer by volume and meets nearly 20 per cent of global demand for generic medicines. In FY25, the pharmaceutical sector recorded an annual turnover of ₹4.72 lakh crore , underlining its scale and importance to the economy. Over the past decade, pharmaceutical exports have grown at a compound annual growth rate of about 7 per cent, with Indian medicines being shipped to as many as 191 countries.

More than half of India’s pharmaceutical exports are directed to highly regulated markets such as the United States and Europe, demonstrating the industry’s ability to comply with stringent global quality standards. However, despite its dominance in volume, India ranks 11th globally in pharmaceutical exports by value, with a 3 per cent share, indicating that the sector still has significant scope to increase earnings by moving into higher-value products.

The Economic Survey noted that this gap between volume and value is driving the industry’s strategic shift. Indian companies are increasingly investing in complex generics that are harder to manufacture, biosimilars that offer affordable alternatives to costly biologic drugs, and innovative research-driven products. This transition is expected to improve profitability, strengthen India’s competitiveness in regulated markets, and reduce dependence on large-volume, low-margin products.

Beyond generics, India continues to play a critical role in global public health through its leadership in vaccine manufacturing. The country supplies a majority of the world’s low-cost vaccines for diseases such as diphtheria, tetanus, pertussis, Bacillus Calmette-Guerin and measles, making it a key contributor to global immunisation programmes.

The Economic Survey also highlighted the rapid expansion of India’s medical devices sector, which is increasingly emerging as a global competitor. Medical devices exports grew sharply from USD 2.5 billion in FY21 to USD 4.1 billion in FY25, with Indian products reaching 187 countries. The industry has moved beyond basic equipment and now manufactures sophisticated devices such as MRI and CT scanners, linear accelerators, cardiac stents and ventilators, marking a significant shift towards high-tech medical manufacturing.

To further scale up the medical devices sector, the Survey stressed the need to reduce import dependence through the adoption of advanced manufacturing technologies, including artificial intelligence and 3D printing. It also called for streamlining global certification processes to improve international market access and enhance India’s export competitiveness.

Overall, the Economic Survey said the Indian pharmaceutical and medical devices industries are well positioned to evolve from being primarily volume-based suppliers to becoming global leaders in high-value healthcare products. By combining scale, quality compliance, innovation and advanced manufacturing, India aims to strengthen its presence in global markets and enhance its role in the international healthcare ecosystem.