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Various initiatives from the Central government to reduce imports of pharmaceutical raw materials and medical devices, and helping the industry to move up the value chain are in progress, says the Economic Survey 2025-26, tabled by Union finance minister Nirmala Sitharaman in the Parliament ahead of the Union Budget 2026-27.
According to the Economic Survey, the Indian pharmaceutical industry is the world’s third-largest by volume, meeting approximately 20% of global generics demand, with exports to 191 countries in FY25. Over 50% of these exports are directed to highly regulated markets such as the United States and Europe. Beyond generics, India is a global leader in low-cost vaccine supply, providing a majority of the world’s diphtheria, tetanus and pertussis (DPT), Bacillus Calmette-Guerin (BCG) and measles vaccines.
In FY25, the sector’s annual turnover reached Rs. 4.72 lakh crore, with exports growing at a CAGR of 7 per cent over the last decade (FY15 to FY 25). India’s medical devices sector is also rapidly becoming globally competitive, with exports to 187 countries in FY25. India currently ranks 11th globally in pharmaceutical exports by value, with a 3% share and medical devices exports have grown significantly from $2.5 billion in FY21 to $4.1 billion in FY25, though there exists substantial scope for further expansion.
To move up the value chain, the pharmaceutical industry is shifting from a volume-driven to a value-driven approach, with greater emphasis on complex generics, biosimilars, and innovation. Likewise, scaling up the medical devices sector necessitates reducing import dependence through the adoption of advanced manufacturing technologies such as AI and 3D printing, along with streamlining global certification processes to strengthen international market access.
The PLI scheme for bulk drugs, aimed to mitigate reliance on imported active pharmaceutical ingredients (APIs) or their key starting materials (KSMs) or drug intermediates (DIs), has mobilised investments worth Rs. 4,763 crore as of September 2025 and created manufacturing capacity of 55,000 MT per year for 26 critical products, including a strategic focus on fermentation-based synthesis for KSMs like penicillin G potassium, which is the precursor for several semisynthetic antibiotics, such as amoxicillin, ampicillin, cloxacillin and dicloxacillin.
Under the Rs. 500 crore Strengthening of Pharmaceutical Industry (SPI) scheme, the Revamped Pharmaceuticals Technology Upgradation Scheme (RPTUAS), has seen 255 applications approved to facilitate units align with global standards. Under the Scheme for Promotion of Bulk Drug Parks, three world-class parks are being developed in Gujarat, Himachal Pradesh, and Andhra Pradesh with a total Rs. 3,000 crore outlay.
As of September 2025, the PLI scheme for medical devices has attracted Rs. 1,093.69 crore in actual investment, and manufacturing of 57 high-end medical devices has started in the country. Under the Scheme for Promotion of Medical Devices Parks, final approval for financial assistance of Rs. 100 crore each has been given to the states of Uttar Pradesh, Tamil Nadu and Madhya Pradesh. Land has already been allotted to 184 manufacturers.
Under the Strengthening of Medical Device Industry (SMDI) Scheme, launched in November 2024 with a Rs. 500 crore outlay, the government focuses on reducing import dependence, capacity building, and supporting clinical studies.
The medical devices industry now manufactures high-end equipment, including MRI and CT scanners, linear accelerators, cardiac stents, and ventilators. The expansion into sophisticated imaging and life-support technologies marks a significant shift toward high-tech medical manufacturing.
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