India eyes global pharma dominance with a ₹5,000 crore revitalisation plan
Summary
- But much will depend on how quickly and effectively the funds are deployed, if regulatory bottlenecks are eased, and how actively private players participate.
India is making a push to move beyond its dominance in generic drugs and establish itself as a hub for pharmaceutical innovation. The government will invite expressions of interest in March for a ₹5,000 crore funding corpus aimed at accelerating research in drug discovery, medical technology (medtech), and stem cell therapy, with bid submissions expected in April.
The initiative, part of the Promotion of Research & Innovation in Pharma MedTech Sector (PRIP) scheme—launched in August 2023 for a five-year period—seeks to boost domestic R&D and reduce India’s reliance on imported technology.
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“We are planning to float the expression of interest (EOI) very likely early next month to get a sense how companies are coming forward and based on the EOI response, we will invite bids in April," said an official from the Department of Pharmaceuticals, familiar with the matter.
The official added that the scheme is designed to support not just startups but also larger pharmaceutical firms looking to invest in drug discovery, medical devices, stem cell therapy, and treatments for drug-resistant diseases.
“The government plans to publish the EoI on Department of Pharmaceuticals' website on the fourth, coupled with an official press release and social media outreach," said another official, adding that industry has been waiting for this.
The plan includes financial support for companies through capital investment or grants. Startups could receive up to ₹1 crore, while larger companies engaged in industrial research may secure ₹100-125 crore per project. The government has allocated ₹4,250 crore for these initiatives, according to the second official.
The second official noted that the number of healthcare and life sciences startups registered with DPIIT has surged over the past four years, rising from 387 in December 2020 to 809 in December 2024.
Mint has seen the copy of Department of Pharmaceuticals' presentation which says that Expression of Interest (EOI) for PRIP scheme to be issued soon.
Queries sent to the Department of Pharmaceuticals remained unanswered till press time.
The push comes as India looks to reduce its import reliance for critical drug ingredients, strengthen its pharma supply chains, and move up the value chain from generics to high-margin, innovative drugs.
Also, while Indian pharma companies have dominated sales of generic medicines in the US, accounting for 47% of all generic prescriptions in 2022, growth in this business is plateauting because of weaker demand, stiffer competition and expiring patents.
Industry leaders say the funding is a step in the right direction, but caution that India's success in pharmaceutical innovation will depend on regulatory reforms and deeper public-private collaboration.
“We have been always saying that the next wave of growth of pharmaceuticals industry will come from innovation," said Sudarshan Jain, secretary general, Indian Pharmaceuticals Alliance (IPA).
"Until now, it was globalization and getting into different markets. The way the scheme is designed it will help the industry-academia collaboration, encourage research related activities, and creation of high-end jobs in R&D. However, the scheme will work better with regulatory simplification," he added.
The R&D divide
India’s pharmaceutical sector must ramp up research and innovation to stay competitive and boost exports. The industry currently holds a 3.4% share of the global market and is projected to reach $108 billion by 2030, growing at an 11% CAGR under a business-as-usual approach.
However, India lags in R&D investment, spending approximately $3 billion annually compared to $50-60 billion in the US and $15-20 billion in China. In FY21, the top 10 Indian pharma companies allocated a modest 7.2% of their sales to R&D, according to the Department of Pharmaceuticals.
The PRIP scheme aims to address this gap by driving industry investment in high-value research and emerging technologies while fostering a strong research culture and a skilled scientific workforce.
Funding innovation
The PRIP scheme focuses on two key components: enhancing research infrastructure and promoting pharmaceutical and medtech innovation.
As part of this initiative, the government will establish Centres of Excellence (CoEs) across all seven National Institutes of Pharmaceutical Education & Research (NIPERs), with a ₹100 crore allocation this year.
The scheme promotes innovation in the pharma and medtech sectors by providing financial assistance to companies and projects, supporting both in-house and academic R&D across six priority areas.
These six priority areas are bio- pharmaceuticals, complex generic drugs including biosimilars, patented drugs or drugs nearing patent expiry, stem cell therapy drugs, medical devices, and anti-microbial resistance.
A total of 67 research projects have been approved under PRIP and launched in the current financial year—though they remain in the early stages. Each CoE will focus on specialized fields such as medical devices, drug discovery, phytopharmaceuticals, and production technology.
India’s pharma market
India’s $50 billion pharmaceutical market is split between $23.5 billion in domestic sales and $26.5 billion in exports. The country ranks third globally by volume and 14th by value, with exports to high-regulation markets like the US, EU, and Japan making up more than half of total exports.
While India has built a reputation as a supplier of affordable generic drugs, its next big challenge is moving up the value chain through R&D-driven innovation.
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According to the Department of Pharmaceuticals, India has a major human resource strength in the pharma sector.
India conducts over 54,000 clinical trials annually and has a workforce of more than four lakh AI professionals, making it the second-largest AI talent pool globally. The country also leads in biosimilar drug development, with 98 approved biosimilars and over 40 currently undergoing clinical trials, the first official added.
