Pharmaceutical Industry in India: With a Focus on Foreign Investment in the Pharmaceutical Industry in India

Abstract

The Pharmaceutical Industry in India is one of the largest and most advanced among the developing countries. The industry now produces bulk drugs belonging to all major therapeutic groups. India's pharmaceutical industry stands third in terms of volume in the world. Its rank is 14th in terms of value. According to the reports prepared by Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers and IMS Health India, the Indian pharmaceutical market reached US$ 10.04 billion in size in July 2010. The Indian Pharma Industry is expected to grow annually at around 8 to 9 percent.

The Indian pharmaceutical industry also needs to take advantage of the recent advances in biotechnology and information technology. The future of the industry will be determined by how well it markets its products to several regions and distributes risks, its forward and backward integration capabilities, its R&D, its consolidation through mergers and acquisitions, co-marketing and licensing agreements.

According to a research done by Associated Chambers of Commerce and Industry (Assocham) the Indian pharmaceutical industry is expected to reach $20 billion by 2015, making it one of the world's top 10 pharmaceuticals markets.

No doubt that the growth story of every sector or industry in any country is the reflection of investments done – both domestic as well as foreign. Hence, it is inevitable to have a look over the investment pattern in the pharmaceutical industry in India to study its growth story.

Keywords: Investment, Pharmaceutical Industry, Drug, Generics, R&D

JEL Classification: K10, K11, K12