India CDMO Market - Healthcare Innovation, Demand Drivers, and Forecast | Persistence Market Research

India's Contract Development and Manufacturing Organization (CDMO) market is expected to grow at a remarkable compound annual growth rate (CAGR) of 13.8% from 2024 to 2031, with projections estimating the market size to escalate from US$ 22.1 billion in 2024 to US$ 54.7 billion by 2031. This rapid expansion reflects India's growing position as a global leader in pharmaceutical manufacturing and outsourcing. The country's unique combination of cost-efficient manufacturing, skilled workforce, robust infrastructure, and regulatory expertise makes it an attractive destination for global pharmaceutical companies seeking to outsource drug development and production.

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Overview of the Market

The India CDMO market has steadily progressed, driven by the country's competitive advantages in pharmaceutical production, including cost-efficiency, skilled labor, and an established manufacturing ecosystem. India's leadership in generic drug production, along with its ability to produce biologics and biosimilars, aligns with the global demand for affordable and high-quality therapies. The country's pharmaceutical infrastructure, further enhanced by favorable government policies such as the Make in India initiative and the Production-Linked Incentive (PLI) scheme, has made it a favorable investment destination. The adherence to international regulatory standards and the ability of Indian CDMOs to offer end-to-end services-from research and development (R&D) to full-scale manufacturing-further strengthens its competitive edge.

India's growing prominence in the global pharmaceutical outsourcing industry is also supported by its increasing focus on biologics and the rising trend of pharmaceutical companies outsourcing drug development. According to Persistence Market Research, the India CDMO market is poised to benefit from these shifts, with further expansion expected in biologics, biosimilars, and vaccine production. The demand for such products, coupled with the nation's advanced manufacturing capabilities, ensures that India remains a dominant player in the CDMO space.

Key Highlights from the Report

• India offers cost-effective manufacturing and a skilled workforce, making it attractive for pharmaceutical outsourcing.
• Competitive labor and infrastructure allow India CDMOs to produce high-quality products at competitive prices.
• Rising global demand for generics and biosimilars is a key factor in expanding the India CDMO market.
• Contract manufacturing services are projected to lead the market with a CAGR of 14.6% through 2031.
• Small molecules dominate the product type segment, anticipated to grow at a CAGR of 14.1% through 2031.
• Government initiatives such as PLI and Make in India have boosted the growth of the CDMO sector in India.

Market Segmentation

Segmentation by Service Type

The India CDMO market is primarily segmented based on service type into Contract Development Services and Contract Manufacturing Services. Among these, Contract Manufacturing Services leads the market, with a CAGR of 14.6% projected through 2031. This segment is fueled by India's established strengths in large-scale pharmaceutical manufacturing. Indian CDMOs are well-equipped to handle the high-volume production demands of Active Pharmaceutical Ingredients (APIs) and Finished Dosage Forms (FDFs). The competitive pricing, scalability, and adherence to international regulatory standards make Indian CDMOs a preferred choice for global pharmaceutical companies looking to outsource manufacturing.

On the other hand, Contract Development Services-which includes services such as drug discovery, formulation development, and clinical trials-remains a key area of growth, though it currently represents a smaller share of the market compared to manufacturing services. However, the demand for comprehensive end-to-end solutions is increasing, and this trend is expected to drive the expansion of contract development services in the coming years.

Segmentation by Product Type

The product type segment in the India CDMO market includes small molecules, biologics, biosimilars, and vaccines. Of these, the small molecules segment holds the largest share, driven by India's extensive capabilities in manufacturing generic drugs and APIs. The demand for small molecule generics has surged globally, particularly as patents for blockbuster drugs expire, leading to a growing market for cost-effective alternatives. This sector is expected to grow at a CAGR of 14.1% through 2031.

While small molecules dominate the market, biologics and biosimilars are also experiencing rapid growth due to the increasing need for complex therapies and the expiration of patents for biologic drugs. Although biologics require more sophisticated infrastructure and technologies, India's growing expertise in biologic manufacturing is positioning the country as a key player in this segment. Additionally, the increasing global demand for vaccines is further contributing to growth in the biologics category.

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Regional Insights

Growth in North America and Europe

India's CDMO sector has been expanding its reach in North America and Europe, which are key regions for pharmaceutical outsourcing. The demand for generics, biosimilars, and biologics in these regions has significantly increased, particularly after the patent expirations of several high-profile drugs. As a result, Indian CDMOs are increasingly partnering with global pharmaceutical companies to meet these growing needs. The cost-effective manufacturing options, coupled with compliance with international regulatory standards, have made India an attractive outsourcing destination for these regions.

Dominance in Asia-Pacific

India's CDMO market is also gaining traction in the Asia-Pacific (APAC) region, particularly in Southeast Asia. With the rapid growth of healthcare infrastructure in countries like China and Japan, Indian pharmaceutical companies are expanding their footprint in these emerging markets. Additionally, India's reputation for high-quality generics and its strong production capabilities make it a natural partner for APAC-based pharmaceutical firms looking to outsource drug development and manufacturing.

Market Drivers

Cost Efficiency and Competitive Advantage

One of the key drivers behind the growth of the India CDMO market is its significant cost advantage. India offers low labor costs and operational expenses, which allows pharmaceutical companies to outsource production at a fraction of the cost compared to Western markets. The country's economies of scale, coupled with a skilled workforce, contribute to its competitive edge in pharmaceutical manufacturing. This cost efficiency makes India an attractive outsourcing destination for global pharmaceutical companies, boosting the demand for CDMO services.

Rising Demand for Generics and Biosimilars

The increasing demand for generics and biosimilars is a significant driver for the India CDMO market. With the global expiration of patents for blockbuster drugs, the need for affordable alternatives has soared. India, as the largest producer of generics, is perfectly positioned to capitalize on this trend. The country's established infrastructure for API manufacturing and its growing expertise in biosimilars production ensure that Indian CDMOs can meet the global demand for affordable, high-quality therapies.

Market Restraints

Infrastructure and Technology Gaps in Certain Segments

Despite India's strengths, there are certain gaps in infrastructure and technology that could restrain the market's growth, particularly in the biologics and advanced therapeutics segments. While India is known for its robust capabilities in small molecule manufacturing, the country's infrastructure for producing biologics, monoclonal antibodies, and gene therapies is still evolving. This technological gap could limit India's ability to fully capitalize on the growing demand for complex biologics and advanced therapeutics, unless there is significant investment in specialized infrastructure and cutting-edge technologies.

Market Opportunities

Rise in Outsourcing by Global Pharmaceutical Companies

As global pharmaceutical companies face mounting pressure to reduce costs and improve efficiency, there has been a notable rise in outsourcing drug development and manufacturing. India, with its cost-effective production, skilled workforce, and adherence to international regulatory standards, is an ideal destination for outsourcing. Indian CDMOs are well-positioned to benefit from this outsourcing trend by offering a wide range of services-from drug discovery and formulation development to clinical trials and manufacturing. This trend represents a significant opportunity for Indian CDMOs to expand their global reach and secure long-term contracts with leading pharmaceutical companies.

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Reasons to Buy the Report

• Gain insights into the market dynamics and growth trajectory of the India CDMO market.
• Understand key drivers, restraints, and opportunities shaping the future of the market.
• Explore market segmentation based on service type, product type, and end-user categories.
• Analyze regional trends and understand how India's market fits into the global CDMO landscape.
• Identify key players and their competitive strategies in the India CDMO market.

Frequently Asked Questions (FAQs)

• How Big is the India CDMO Market?
• Who are the Key Players in the Global Market for CDMOs?
• What is the Projected Growth Rate of the India CDMO Market?
• What is the Market Forecast for the India CDMO Market by 2032?
• Which Region is Estimated to Dominate the India CDMO Market through the Forecast Period?

Company Insights

The key players operating in the India CDMO market include:

• Piramal Pharma Solutions
• Syngene International
• Dr. Reddy's Laboratories
• Divi's Laboratories
• Lupin Limited
• Sun Pharmaceutical Industries Ltd.
• Aurobindo Pharma
• Jubilant Pharmova (Jubilant Biosys & Jubilant Generics)
• Glenmark Pharmaceuticals
• Capsule Pharma
• Laurus Labs
• Strides Pharma Science
• Aurigene Pharmaceutical

Recent Developments

In June 2024, Lupin announced its entry into the CDMO business through its newly formed subsidiary, Lupin Manufacturing Solutions (LMS).

In May 2023, Dr. Reddy's Aurigene Pharmaceutical Services invested $40 million to build a state-of-the-art facility in Genome Valley, Hyderabad, focusing on therapeutic proteins and antibodies.

India's position as a leader in the global CDMO market is poised to expand further, driven by competitive advantages, rising demand for generics and biosimilars, and growing outsourcing by global pharmaceutical companies. As India continues to invest in infrastructure, technology, and regulatory.

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