INDIA –The Indian pharmaceutical sector saw a 200 percent increase in foreign direct investment (FDI) in 2020-21, according to the Economic Survey 2021-22, which has been tabled in Parliament by Finance Minister Nirmala Sitharaman.
According to the Survey, FDI inflows remained buoyant in 2021-22 (April-September) at Rs 4,413 crore, (US$589 million) growing at a rate of 53 percent over the same period in 2020-21.
The inflows remained buoyant, according to the Department of Economic Affairs in the annual Economic Survey (2021-22), citing how FDI in the pharmaceutical sector saw a 200% increase over the previous fiscal year in 2020-21.
“The extraordinary growth of foreign investments in pharma sector is mainly on account of investments to meet COVID-19 related demands for therapeutics and vaccines” the Department said.
The government stated in the pharmaceutical section that the country is the largest supplier of generic medicines, accounting for 20 percent of global supply.
India is the largest supplier of generic medicines, with a 20 percent share in the global supply. Price competitiveness and high quality were two factors that contributed to Indian pharmaceutical companies becoming dominant players in the global market, earning the country the moniker “Pharmacy of the World.”
In terms of volume, the Indian pharmaceutical industry ranks third in the world.
During 2020-21, India’s pharmaceutical exports totaled US$24.4 billion, while pharmaceutical imports totaled US$7 billion, resulting in a US$17.5 billion trade surplus.
Despite being a major player in formulations, the country is heavily reliant on the importation of bulk drugs used in the manufacture of pharmaceuticals. In some cases, import dependence ranges from 80 to 100 percent.
Against this backdrop, a high-level committee examined the issue of import dependence for critical bulk drugs, and a comprehensive set of actions to incentivize bulk drug production has been launched.
It includes the launch of a Scheme for Promotion of Bulk Drug Parks, as well as the approval of a production linked incentive scheme for bulk drugs.
Accordingly, a budgetary allocation of Rs.6,940 crore (US$926.6 million) for the next eight years, to promote domestic manufacturing of 53 critical Active Pharmaceutical Ingredients (APIs).
Additionally, a Production Linked Incentive (PLI) scheme for pharmaceuticals with a budget of Rs.15,000 crore (US$2 billion) and a Rs.3,420 crore (US$45.7 million) PLI scheme for promoting domestic manufacturing of Medical Devices has been allocated.
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