Indian Pharma Eyes 9–11% Growth in FY26 with Quality Push

India’s pharmaceutical industry, valued at nearly $60 billion and ranked third globally by volume, is expected to grow 9–11% in FY2026, driven by a strategic shift towards quality, sustainability and market diversification. The sector, a major global supplier of generic medicines and vaccines, is increasingly moving away from volume-led growth to a value-driven and innovation-oriented approach.

In FY25, India’s pharmaceutical exports touched a record high of over $30 billion, rising around 9.4% year-on-year. According to rating agency ICRA, domestic market growth of 8–10% and strong performance in Europe, estimated at 15–17%, will support overall expansion. However, growth in the US market is likely to moderate to 4–6% due to pricing pressures on key drugs such as Lenalidomide, along with higher compliance and regulatory costs. Despite these challenges, operating profit margins are expected to remain stable at 24–25% in FY2026, aided by steady raw material prices and healthy market performance.

Industry experts note that the global generics environment, particularly in the US, has undergone a structural change. Pricing pressures and increased regulatory scrutiny mean that scale alone is no longer sufficient to ensure growth. Companies are now being forced to make strategic decisions on portfolio focus, geographic diversification and sustainable manufacturing practices.

At the 21st Annual General Meeting of the Pharmaceuticals Export Promotion Council of India (Pharmexcil), industry leaders stressed the need to pivot towards complex generics, speciality active pharmaceutical ingredients (APIs) and advanced dosage forms. These products require sophisticated chemical processes, enhanced process control and higher quality assurance standards.

There is also growing emphasis on green and sustainable chemistry, including flow chemistry and continuous manufacturing, as tools to ensure consistency, regulatory compliance and long-term competitiveness. Experts highlighted that wider awareness, technical guidance and phased adoption will be critical for bulk drug manufacturers transitioning to these advanced and environmentally responsible processes.

As Indian pharma moves up the value chain, the focus on patient-centric and targeted therapies is intensifying. Pharmexcil has reiterated its commitment to supporting exporters through policy alignment, capability building and global engagement, ensuring the sector meets rising international expectations on quality, complexity and sustainability.