India API Industry - Market Size, Trends & Analysis - Forecasts to 2026  By Type (Innovative APIs, Generic APIs), By Type of Manufacturer (Captive API Manufacturer, Merchant API Manufacturer), By Type of Drug (Prescription Drugs, Over-the-counter Drugs), By Type of Synthesis (Synthetic APIs, Biotech APIs), By Therapeutic Application (Communicable, Diseases, Oncology, Diabetes, Cardiovascular Diseases, Pain Management, Respiratory Diseases, Other Therapeutic Applications), By Country (India); Vendor Landscape, End User Landscape and Company Market Share Analysis & Competitor Analysis

India API Industry - Market Size, Trends & Analysis - Forecasts to 2026 By Type (Innovative APIs, Generic APIs), By Type of Manufacturer (Captive API Manufacturer, Merchant API Manufacturer), By Type of Drug (Prescription Drugs, Over-the-counter Drugs), By Type of Synthesis (Synthetic APIs, Biotech APIs), By Therapeutic Application (Communicable, Diseases, Oncology, Diabetes, Cardiovascular Diseases, Pain Management, Respiratory Diseases, Other Therapeutic Applications), By Country (India); Vendor Landscape, End User Landscape and Company Market Share Analysis & Competitor Analysis

  • Published Date: May 20 : 2020
  • Base Year for Estimate: 2019
  • Report Id:2031

Indian API Industry: Market Insights

The Indian API Industry market is estimated to witness a high CAGR during the forecast period (2020-2026). The Indian pharmaceutical industry is the world’s third largest in terms of volume and thirteenth largest in terms of value. The increasing incidence of chronic diseases, along with growing importance of generics are some of the major factors driving the growth of the Indian APIs market. Advancements in active pharmaceutical ingredient (API) manufacturing, and growth of the biopharmaceutical sector is also driving the market growth.

The growth of the industry has been driven by adopting global standards and setting up large scale plants in the country. India has the highest number of US FDA approved plants, approximately 665 and occupies 44% of global abbreviated new drug applications (ANDA).

The Indian government has launched many government schemes to promote API (bulk drug) through clusters and Production Linked Incentive (PLI) program. The PLI program helps and support the ‘Make in India’ initiative for domestic manufacturers.

The Indian pharmaceutical industry achieved tremendous growth over the past few decades. India supplies 20% of global demand for generic medicines in terms of volume and supplies more than 60% of the global demand for various vaccines and Antiretroviral (ARV) drugs. India’s API industry is ranked as the third largest in the world, and the country contributes approximately 57 per cent of APIs to prequalified list of the WHO.

Comparative study of India and China

China has emerged as the global leader in production and export of APIs by volume of global API production. China holds a significant share of APIs and intermediates such as penicillins, vitamins, antipyretic, analgesics, prils, statins and sartans among others in the world.

The Indian API industry is valued at INR 798 Billion in 2020 and is projected to reach INR 1,307 Billion by 2026, at a CAGR of 8.57%.

The China API industry is valued at INR 982 Billion in 2020 and is projected to reach INR 1,431 Billion by 2026, at a CAGR of 6.49%.

Cost breakup and comparison between India & China

Cost of production and breakup include financing, logistics, production and set-up costs. China is expected to dominate position in the market due to infrastructure investment, large-scale manufacturing capacities, cost efficiency, technical capabilities and supportive government policies among others. Cost of production in China is approximately 20-30% lower than in India. The raw material cost is 25-30 % expensive in India compared to China. The labor cost in India in 1.85% less compared to China. The cost of raw materials accounts for almost two-thirds of the cost of manufacturing of API products.

Chinese government has launched a new mechanism to reduce the time for clinical trial approval (CTA). Approval timeline for smaller molecules decreased from 25 months in 2015 to nine months in 2018. Approval timeline for large molecules decreased from 22 months in 2015 to 8 months in 2018.

Indian government also has plans to provide impetus to domestic API manufacturing. The government is also considering to exempt manufacturers from Drug Price Control Order (DPCO) if a medicine is manufactured from a locally produced API. Further:

  1. Land and other infrastructural facilities at concessional rates, interest subsidies on bank loans (through interest subvention up to 7.5 per cent)
  2. Single-window environmental clearance to API manufacturers for all drugs once the plant is approved by the environment ministry
  3. Income tax benefits for an initial period of 10 years for each product from the date of launch of the product

In March 2020, the Indian Government announced a package of INR 9,940 crore for bulk drugs industry to boost domestic production and exports. The Government has also approved INR 6,940 crore for a production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical key starting material (KSM), drug intermediates and active pharmaceutical ingredients.

China ranked 31st and India ranked 63rd in 2019 in World Bank’s ease of doing business rankings 2020. India ranked 68th and China ranked 56th for trading across borders in 2019.

Procedures and time required to start business - India vs China

 

India

China

Registering property (time in days)

58

9

Registering property (number of procedures)

9

4

Getting electricity (time in days)

53

32

Getting electricity (number of procedures)

4

2

Dealing with construction permits (time in days)

106

111

Dealing with construction permits (number of procedures)

15

18

Starting a business (time in days)

18

9

Starting a business (number of procedures)

10

4

Manufacturing capacity comparison for select APIs - China vs India

APIS

Average capacity of a Chinese company (MT per annum)

Average capacity of an Indian company (MT per annum)

Gabapantene KSM CDA

14,000

3000

Losartan

600

200

Pregablin

500

150

Simvastatin

500

150

Amoxycillin

14,000

5000

Cef Acid

600

200

 

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The Indian API Industry has been studied from the year 2017 till 2026. However, the CAGR provided in the report is from the year 2018 to 2026. The research methodology involved three stages: Desk research, Primary research, and Analysis & Output from the entire research process.

India API Industry - Market Size, Trends & Analysis - Forecasts to 2026

The desk research involved a robust background study which meant referring to paid and unpaid databases to understand the market dynamics; mapping contracts from press releases; identifying the key players in the market, studying their product portfolio, competition level, annual reports/SEC filings & investor presentations; and learning the demand and supply side analysis for the Indian API Industry.

India API Industry - Market Size, Trends & Analysis - Forecasts to 2026

The primary research activity included telephonic conversations with more than 50 tier 1 industry consultants, distributors, and end-use product manufacturers.

India API Industry - Market Size, Trends & Analysis - Forecasts to 2026

Finally, based on the above thorough research process, an in-depth analysis was carried out considering the following aspects: market attractiveness, current & future market trends, market share analysis, SWOT analysis of the companies and customer analytics.

India API Industry - Market Size, Trends & Analysis - Forecasts to 2026

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