The pharmaceutical industry in India holds global relevance, with India exporting products to more than 200 countries. StockGro expert Chahat Aggarwal says, “India’s pharmaceutical sector, valued at $50 billion in FY 2023-24, is set for strong growth”.
The COVID-19 pandemic has brought significant traction to the ever-relevant pharmaceutical industry by exposing significant loopholes and drawbacks of the segment. The lifestyle of modern man has resulted in higher lifestyle diseases. The pharma companies are striving for continued innovation to keep up with the changing needs of humanity.
The Union Budget 2025 is set to be floored in the Parliament on 1st February. Aggarwal believes that the growth of the Pharmaceutical industry is “driven by increasing healthcare awareness, patent expirations, and government initiatives like the PLI scheme”. The sector expects the 2025 budget to provide priority on these parameters that are contributing to the growth.
India is the third-largest pharmaceutical manufacturer by volume, with a favourable reputation in generic medicine production. However, the nation falls behind in novel medication research. Increased R&D investment may help India become a world leader.
Pharma companies and other industry experts anticipate an increase in government allocation in the segment. The pharmaceutical industry also expects an increase in deductions and other means of incentivising research in the field.
The expert believes that greater investment in research will promote innovation and enable the country to stay ahead of other international players, resulting in its emergence as a global leader.
In India, many agencies oversee a variety of licenses and compliances for the pharmaceutical and medical device industries. The regulatory complications hinder the smooth functioning of the pharmaceutical industry.
The government might explore establishing a unified regulating authority for pharmaceuticals and medical devices, with experts from both industries on board. This would not only make conducting business easier by streamlining the regulatory environment, but it would also increase investment in the area.
Medical tourism is an act of visiting another nation to acquire medical treatment. Medical tourism in India is predicted to reach $13 billion BY 2026.
The impact of budget on the pharma industry can influence medical tourism in India. Experts believe that there is a need to enhance the industry for India to become a more popular worldwide healthcare tourism destination.
As India continues to progress in medical tourism, simplifying visa procedures, offering tax incentives to foreign patients, and making infrastructural investments will increase India's appeal on a worldwide scale.
The average period for patent approvals is presently 50 months, which is longer than the global average. The government has acknowledged the need to shorten this time. The government wants to bring India's intellectual property regime closer to international norms and increase its attractiveness to pharmaceutical businesses from across the world by aiming for a decrease of about 30 months.
Healthcare is a primary human right that should be accessible to all sections of society irrespective of their economic backgrounds. Industry experts and pharma companies are anticipating the following parameters in the Union Budget 2025 for the promotion of universal healthcare.
The focus of India's healthcare system is mostly on curative care. Only 14% of government funding goes toward preventative healthcare, which results in long-term inefficiencies and rising medical expenses.
Funds for preventative healthcare, including wellness initiatives, health screenings, and campaigns to raise public awareness of common health problems like anaemia and lifestyle illnesses like diabetes and cardiovascular ailments, may be included in the Union Budget 2025.
India is heavily reliant on imports of Active Pharmaceutical Ingredients (APIs) from nations like China. Experts voice the requirement for incentives and other measures to increase domestic production.
PLI is an abbreviation for production-linked incentive. The impact of the Union Budget on domestic production can be enhanced through PLI schemes that promote the Indigenous production of pharmaceutical products.
Public policy experts and the healthcare industry have long expected the government to increase healthcare spending to 2.5%–3% of GDP. The global average, which includes both developed and developing countries, is 6%, but India has been at 1.5%–2.1% for the past few years. It is a major contributing factor to the nation's inadequate health infrastructure.
The Pharmaceutical industry in India is undergoing extensive transformation. The Union Budget 2025 is expected to boost the growth of this industry, resulting in some pharma companies emerging as key players.
Among various pharma companies, Aggarwal believes that investors might watch out for Sun Pharmaceuticals. He says, “Sun Pharmaceutical, with its solid revenue growth and focus on speciality drugs, is leading the charge in this expanding market.”
Expansion of an essential sector like pharmaceuticals can give a significant push to the Indian economy. Aggarwal believes, “As global demand rises and opportunities in the US and emerging markets grow, India’s pharma industry is well-positioned to maintain its global leadership in affordable, high-quality medicines.” The Union Budget 2025 might play a crucial role in transforming these estimates into reality.
Chahat Aggarwal details on the StockGro platform how the Pharma sector is drawing attention from investors, with large-cap companies like Sun Pharmaceutical being the top choice. For more details on her advisory calls, connect with her on StockGro.
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