Pharmaceuticals

The Indian pharmaceutical industry is driving product development and breaking new grounds in medicine research worldwide. The Indian domestic pharmaceutical market is estimated to be US$ 10.76 billion in 2008 and is expected to grow at a high compound annual growth rate (CAGR) of 9.9 per cent till 2010 and thereafter at a CAGR of 9.5 per cent till 2015. Currently, the Indian pharmaceutical industry is one of the world's largest and most developed, ranking 4th in volume terms and 13th in value terms.


The country accounted for 8 per cent of global production and 2 per cent of world markets in pharmaceuticals. The Indian pharmaceutical offshoring industry is slated to become a US$ 2.5 billion opportunity by 2012, thanks to lower R&D costs and a high-talent pool in India. India exported drugs worth US$ 7.2 billion in 2007-08 to the US and Europe, followed by Central and Eastern Europe, Latin America and Africa.


A report by industry research firm, RNCOS forecasts that pharmaceutical exports will grow at a CAGR of 18.5 per cent between 2007-08 and 2011-12. This growth will be fuelled by multi-billion dollar patent expirations and growth in the global generics market. Pharmaceuticals exports (valued in US dollar terms) registered an impressive growth rate at 30.7 per cent during April-October 2008 compared to the corresponding period last year.


Government has offered tax-breaks to the pharmaceutical sector. Units are eligible for weighted tax deduction at 150 per cent for the R&D expenditure incurred. Steps have been taken to streamline procedures covering development of new drug molecules, clinical research etc. Government has launched two new schemes—New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Programme—specially targeted at drugs and pharmaceutical research.