The Indian pharmaceutical industry is the world’s third largest in terms of volume and thirteen largest in terms of value. The impact transcends the value chain, with Indian pharmaceutical companies leading in APIs as well as formulations. India’s API industry is ranked the third largest in the world, and the country contributes approximately 57 per cent of APIs to the pre-qualified list of the WHO1.

Pharma Infographics

Invest India website, Indian API Industry – Reaching the full potential, KPMG in India, CII report, April 2020, Department of Commerce, Government of India

The recent policy changes and government reforms in the space have positioned India as a preferred market for global investments and establishing local manufacturing facilities. Apart from allowing a 100 per cent FDI for greenfield and 74 per cent FDI for brownfield projects2 under the automatic route, the government has also announced establishment of three bulk drug parks, and the Production Linked Incentive (PLI) scheme of upto INR6,940 crores have been approved for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) in India.3

Key growth drivers

Established ecosystem to support pharma manufacturing

  • Indian manufacturing infrastructure has evolved from export of simple APIs to becoming one of the largest generic drug exporters to global markets

Lower manufacturing cost

  • Approximately 33 per cent lower manufacturing cost than that of the U.S. and half of Europe enables India to manufacture high-quality medicines at competitive prices4

Government initiatives

  • Government initiatives like New Drug and Clinical Trial Rules, 2019, easing of FDI norms and Make in India to support local manufacturing

Large pool of qualified personnel

  • India has a large, growing trained and skilled workforce to support the establishment of largescale pharmaceutical manufacturing projects. 

How can KPMG in India help?

Among the fastest and largest growing practices in India

  • KPMG in India’s healthcare and pharmaceuticals practice has more than 15 Partners/Directors and 50+ dedicated professionals for healthcare and pharma sector across various service lines
  • Strong advisory team focused on pharmaceutical sector
  • A strong deals team in India with experience in driving large scale deals in pharma and life sciences

Wide array of services

  • Our service offerings span across the value chain – tax, deals, IT/digital consulting, business transformation and risk consulting services
  • 40+ services that are tailored to meet client and market demand in the healthcare and pharmaceutical sector
  • Wide range of clients spanning from MNCs to public and private sector. KPMG in India has experience in providing tailored services to a range of healthcare providers

Credible experience

  • Extensive experience of working with central and state governments driving various development initiatives and supporting ease of doing business
  • Deep relationships within the industry and government
  • Direct experience in supporting companies and state governments to carry out investments in India.
  1.  Indian API Industry – Reaching the full potential, KPMG in India, CII report, April 2020
  2. FDI India, 11 May 2020
  3. FICCI welcomes cabinet decisions on Bulk Drug Parks, 23 March 2020
  4. Invest India website accessed on 20 August 2020

Guidance note to readers: We have relied on secondary sources which are considered reliable but have not independently verified the data. KPMG shall not be liable and/ or responsible for any reliance placed on the content of the website.

Sector Lead

Vijay Chawla

Partner and Chief Operating Officer – Consulting | Head – Life Sciences

KPMG in India