Economic Survey 2025-26: Pharma industry shifting from volume to value driven approach

India’s pharmaceutical industry is sharpening focus on complex generics, biosimilars and innovation as it moves up the value chain, according to the Economic Survey 2025-26.

Third-largest by volume globally and meeting around 20% of global generics demand – with exports to 191 countries in FY25 – the industry is shifting from a volume-driven to a value-driven approach. Over 50% of the exports are directed to highly regulated markets such as the U.S. and Europe.

Beyond generics, India is a global leader in low-cost vaccine supply, providing a majority of the world’s DPT, BCG and measles vaccines, the Survey document tabled in the Parliament on Thursday (January 29, 2026) noted.

India’s medical devices sector is also rapidly becoming globally competitive, exporting to 187 countries in FY25. It now manufactures high-end equipment, including MRI and CT scanners, linear accelerators, cardiac stents and ventilators. This expansion into sophisticated imaging and life-support technologies marks a significant shift toward high-tech medical manufacturing.

While medical devices exports have grown from $2.5 billion in FY21 to $4.1 billion in FY25, the scope for further growth is substantial. For scaling up, the medical devices sector needs to reduce import dependence through adoption of advanced manufacturing technologies such as AI and 3D printing, along with streamlining global certification processes to strengthen international market access, the document of Finance Ministry’s Department of Economic Affairs recommended.

On its part, the government has launched various policy measures from production linked incentive (PLI) schemes for pharma as well as medical devices; promotion of bulk drug parks with a ₹3,000 crore outlay in Gujarat, Himachal Pradesh and Andhra Pradesh; and a scheme for promotion of medical devices parks under which final approval for financial assistance of ₹100 crore each has been given to Uttar Pradesh, Tamil Nadu and Madhya Pradesh. Under the scheme, land has already been allotted to 184 manufacturers.

The PLI scheme for bulk drugs has mobilised ₹4,763 crore investments upto September 2025 and created manufacturing capacity of 55,000 tonnes 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.

As of September, the PLI scheme for medical devices attracted ₹1,093.69 crore in investment. Manufacturing of 57 high-end medical devices has begun in the country, the Survey document showed.

In November 2024, the Centre had launched the Strengthening of Medical Device Industry (SMDI) scheme with a ₹500 crore outlay focused on reducing import dependence, capacity building and supporting clinical studies. It has also launched a scheme with an outlay of ₹500 crore to support MSMEs and clusters.