India: The Next Frontier in Global CDMO Services?
India’s pharmaceutical industry has long been synonymous with cost-effective pharmaceutical manufacturing - particularly when it comes to generic drugs. In recent years, India has been making a significant shift from low-cost generic drug production into CDMO services.
With recent projections estimating that India's CDMO market will nearly triple from its 2023 market share (USD 15.63 bn) to USD 44.63 bn by 2029, can it truly emerge as the next global CDMO powerhouse?
A Legacy in Generic Drug Manufacturing
India has long held a dominant position in the global pharmaceutical industry - primarily as the world’s largest supplier of generic drugs - giving the country a reputation as the “Pharmacy of the World.” Indian pharmaceutical firms have excelled in comparison to other parts of the world, due to their high-quality, low-cost drugs at scale, benefiting from economies of scale, a skilled workforce, and favourable regulatory policies.
However, its focus on generics has meant that India’s presence in high-value pharmaceutical services, remains relatively underdeveloped compared to that of North America, Europe, and China. Could this soon change, as Indian CDMOs move into more complex drug development and manufacturing processes - including biologics and advanced therapies?
The Growth of India’s CDMO Sector
The Indian CDMO industry is experiencing explosive growth as more biopharma companies take their search global in a quest for cost-efficient, high-quality CDMO partners, the country is primed for growth. Geopolitical shifts, supply chain vulnerabilities, and rising costs in Western countries have accelerated demand for underutilised outsourcing destinations – pushing India further into the spotlight.
One of the most significant developments in India’s CDMO evolution is its expansion into biologics - traditionally dominated by North American and European CDMOs. Government support has played a crucial role in accelerating India’s entry into biologics, with programs like the Biotechnology Industry Research Assistance Council (BIRAC) helping to foster biotech innovation, fund startups, and build infrastructure that enables and supports large-scale biologics production.
Additionally, the Indian government has introduced policies to improve regulatory frameworks and introduce fast-track approvals, added by foreign investment. Early signs suggest that these efforts appear to have worked – as some Indian CDMOs have witnessed a 50 percent year-on-year surge in requests for proposals (RFPs) - as reported by Boston Consulting Group (BCG).
What’s Driving India’s CDMO Growth?
There are three main drivers behind India’s CDMO potential, which, when combined, position the country favourably against other countries:
1. Cost Advantage
India’s manufacturing costs are 20–30% lower than those of China, and significantly lower than those of North America and Europe. Lower operational costs, affordable skilled labor, and streamlined production processes make India an economically attractive option for pharmaceutical companies looking to optimize their supply chains.
2. Skilled Workforce
India boasts one of the largest pools of scientifically trained professionals, with thousands of graduates in biotechnology, chemistry, and pharmaceutical sciences entering the workforce each year ready to leverage their talent to drive innovation and enhance their expertise.
3. Infrastructure and Investment
India is experiencing rapid growth in state-of-the-art manufacturing facilities, AI-powered quality control, and biotech-focused industrial zones. The rise of biotech parks and special economic zones further strengthens the country’s position as a leading CDMO hub. With increasing foreign direct investment and domestic capital flowing into pharmaceutical infrastructure, India will more than likely provide the capacity to handle complex biologics and small molecule manufacturing at a global scale.
India Versus the Rest of the World
The real challenge for India is how it competes with established competition from North America, Europe, and the rest of Asia.
North America tends to be favored by many biopharma companies, as it has historically led the way in innovation, biologic expertise and rigorous compliance. However, its high operational costs and scalability challenges limit its potential, and present opportunities where India can compete.
In Europe, regulation is just as strict but the continent excels in speciality drug production and sustainable practices. Labor costs are similarly high to those in North America, but European companies face significant reliance on external markets for raw materials, which make supply chains susceptible.
Historically, China has always been the biggest threat to India for low-cost pharmaceutical manufacturing and production. But given the increasing regulatory scrutiny, geopolitical tensions, and supply chain concerns, India has a great chance to take advantage and position itself as a low-cost global leader.
So, What’s Stopping Indian Domination?
While India’s distinct advantage lies in its combination of low costs, skilled talent, and geopolitical stability, it faces challenges too.
If the country continues to invest in quality control, infrastructure, and innovation, it has the potential to rival, if not surpass, its competitors in the global pharmaceutical contract manufacturing space.
However, its ability to sustain growth will depend on its commitment to those same quality control goals, infrastructure investment, and displaying regulatory excellence. Whether it will fully emerge as a dominant force remains to be seen, but its trajectory points toward a future where it is no longer just the ‘Pharmacy of the World’, but is also a key strategic partner in high-value pharmaceutical innovation.