Reports

Economic Survey 2024-25 Highlights Need for Innovation in Pharma Sector

“The overall pharma landscape in India indicates a strong need to focus on innovation, new drug development, and biopharmaceuticals, as R&D spending remains lower than that of global leaders,” the survey highlighted.

• By Newsdesk
• New Delhi
• Jan 31, 2025

Reports

The Economic Survey 2024-25, presented in Parliament on Friday, underscores the urgent need for increased investment in innovation, new drug development, and biopharmaceuticals within India’s pharmaceutical sector. Despite being a global pharmaceutical hub, the country’s research and development (R&D) expenditure continues to lag behind leading international players.

India’s Pharma Growth and Export Strength

The Indian pharmaceutical industry recorded a total annual turnover of ₹4.17 lakh crore in FY24, marking an average annual growth of 10.1% over the past five years. Exports played a significant role, contributing to 50% of total revenue, amounting to ₹2.19 lakh crore in FY24. Meanwhile, pharmaceutical imports stood at ₹58,440.4 crore during the same period.

“The overall pharma landscape in India indicates a strong need to focus on innovation, new drug development, and biopharmaceuticals, as R&D spending remains lower than that of global leaders,” the survey highlighted.

Government Initiatives to Boost Pharma Innovation

To strengthen the sector, the government has implemented various initiatives, including the Production-Linked Incentive (PLI) scheme and the Strengthening of Pharmaceuticals Industry (SPI) program. The PLI scheme aims to enhance domestic manufacturing capabilities by reducing reliance on imports of critical Key Starting Materials (KSMs), Drug Intermediates, and Active Pharmaceutical Ingredients (APIs).

Additionally, the survey highlighted key regulatory advancements. In October 2023, the Central Drugs Standard Control Organisation (CDSCO) approved India’s first indigenously developed CAR-T cell therapy, a breakthrough in advanced cancer treatment.

To accelerate the introduction of innovative drugs, including gene therapy products, orphan drugs, and treatments offering significant therapeutic advantages, the CDSCO has introduced a policy allowing waivers for local clinical trials of new drugs that have already been approved and marketed in select regions, including the United States, United Kingdom, Japan, Australia, Canada, and the European Union.

Future Outlook

With continued policy support and a sharper focus on innovation, India’s pharmaceutical industry is poised to strengthen its position as a global leader in drug development and biotechnology. The Economic Survey emphasizes that increasing R&D investment and fostering innovation will be crucial in driving the next phase of growth for the sector.