India's pharmaceutical market demonstrated robust performance in July 2026, recording ₹23,193 crore in sales value, representing a 12.1% year-on-year growth from ₹20,494 crore in the same month last year. According to market research firm Pharmarack, the growth was led by chronic therapies with cardiac and anti-diabetic segments posting double-digit value growth. The anti-diabetic segment recorded a 17.6% year-on-year rise in sales value at ₹2,237 crore, while cardiac therapy saw 14.7% growth at ₹3,299 crore. The rise in anti-diabetic segment can be attributed to the high-burden of patients with hypertension and Type-II diabetes, along with steady sales growth in glucagon-like peptide (GLP-1) drugs used for glycemic control.
India's pharmaceutical industry leveraged the 1991 economic reforms to build globally competitive capabilities in active pharmaceutical ingredients (APIs), formulations, generics and biosimilars. According to Business Standard reports, Dr Reddy's Laboratories chairman Satish Reddy highlighted how the company's API business taught them how to compete globally, with the company becoming the third-largest supplier of ibuprofen in the US before liberalisation. The reforms opened international capital markets, enabling the company to raise ₹48 million through a global depositary receipt issue listed on the Luxembourg Stock Exchange in the 1990s.
Despite India's earlier start in drug discovery, China has moved years ahead in pharmaceutical innovation. As reported by Business Standard, Reddy explained that China's rise was a concerted, state-backed effort with technology accessibility combined with plant scale that pushed Indian producers out of several products. Dr Reddy's was once among the largest producers of ciprofloxacin but eventually stopped manufacturing it and began sourcing from China. The company has since begun diversifying sources rather than relying on one country, with the pandemic making supply-chain resilience a global priority.
According to Reddy's analysis reported by Business Standard, India needs a carefully orchestrated innovation framework built around four key elements: regulation, funding, infrastructure, and academia-industry collaboration. The regulatory system requires further reform with drug-discovery approval timelines that were historically long due to limited in-house expertise. Funding must be available at different stages with the government's Promotion of Research and Innovation in Pharma-MedTech scheme being a good beginning, though ₹5,000 crore is small relative to the need. India's venture-capital system for drug discovery remains underdeveloped, with the country spending only around 0.7% of GDP on R&D.
As reported by Business Standard, the Indian market is not sufficiently conducive to recovering innovation costs, with products launched only in India generating only a few hundred crore rupees that does not cover development costs. Multinational companies also hesitate to launch new molecules in India due to limits on pricing that can affect other markets through reference pricing. Reddy suggested creating a dedicated procurement fund for innovative products to improve patient access and allow innovators to recover at least part of their costs. The government should restore weighted deduction of 200% of R&D expenditure for taxable profits, which was withdrawn due to misuse by some companies.
According to Business Standard reports, India needs a vibrant ecosystem that includes both startups and large companies with meaningful scale compared to countries like China. Pharma companies account for about 30% of private-sector research spending within India's overall research expenditure. Reddy emphasized that the next major pivot for Indian pharma must be from global competitiveness in generics to innovation, with government policy enabling this shift through appropriate regulatory reforms, funding mechanisms, and infrastructure development. The recent introduction of Eisai's Leqembi alongside Lilly's Kisunla in India's market of close to 9 million people living with dementia highlights the potential for innovation-driven growth, though ecosystem gaps threaten early adoption and pricing innovation could be pivotal to drive access.
