Pharma Industry Should Reduce Dependence on Import of Raw Materials: Rajesh Agarwal

Why It Matters

Reducing import dependence strengthens supply‑chain resilience and safeguards India’s pharma export momentum amid global instability. It also positions the sector to capture emerging opportunities like biosimilars, driving future growth.

Key Takeaways

• India aims to cut raw material import reliance.
• API import substitution remains challenging but encouraged.
• Pharma exports grew 5.6% to $28.29 bn FY25‑26.
• Target FY26 export goal $32 bn hinges on March shipments.
• Focus on biosimilars and resilient supply chains.

Pulse Analysis

India’s pharmaceutical industry has become a cornerstone of the national economy, contributing about $60 billion in revenue and employing millions. Yet its heavy dependence on imported raw materials—particularly active pharmaceutical ingredients—exposes it to supply‑chain disruptions from geopolitical tensions, trade barriers, and price volatility. Government officials, led by Commerce Secretary Rajesh Agarwal, are advocating a strategic shift toward domestic sourcing, emphasizing that even partial import substitution can fortify the sector against external shocks while fostering local R&D and manufacturing capabilities.

Export performance underscores the sector’s resilience, with FY 25‑26 figures showing a 5.6% rise to $28.29 billion. However, the West Asia conflict has introduced uncertainty, threatening the March shipment target needed to reach the FY 26 export goal of $32 billion. As major markets increasingly prioritize local production, Indian firms must identify high‑potential destinations and adapt to shifting trade dynamics. Strengthening export promotion through bodies like Pharmexcil and leveraging trade agreements can help mitigate the impact of regional disruptions.

Looking ahead, the industry’s growth hinges on diversifying its product portfolio and supply base. Investment in API manufacturing plants, coupled with incentives for biosimilar development, can reduce import reliance and open new revenue streams. Policymakers are expected to roll out supportive measures—such as tax breaks, streamlined approvals, and infrastructure upgrades—to accelerate domestic capacity building. Companies that proactively enhance supply‑chain robustness and expand into emerging markets will be best positioned to sustain India’s pharma leadership on the global stage.