Global Competitiveness of Indian Pharmaceutical Industry: Trends and Strategies

Abstract

What are the trends in the global competitiveness of the Indian pharmaceutical industry? Where does this industry stand when compared to global peers on pharmaceutical value-added, productivity, research and development and trade performance? What are the new strategies that Indian pharmaceutical companies are adopting to become global players? These questions are addressed in this paper. It is found that strategic government policies were the main factors that transformed the status of the Indian pharmaceutical industry from a mere importer and distributor of drugs and pharmaceuticals to an innovation-driven cost-effective producer of quality drugs. India emerged as one of the fast growing pharmaceutical industry in the world with growing trade surpluses and exports. However, there are certain limitations that the government policies need to address, like low productivity and R&D intensity. A host of competitive strategies, like greenfield direct investment, overseas acquisitions, strategic alliances and contract manufacturing have emerged as favourites to Indian pharmaceutical firms recently.

Keywords: Indian Pharmaceutical Industry, Productivity, Innovation, Trade, Strategic Alliances, Foreign Investment, M&As

JEL Classification: L65, D24, O3, F14, L2, L22, G34