India’s pharmaceutical industry has travelled a remarkable journey since independence. In 1947, the country depended heavily on imported medicines and foreign companies, with limited domestic manufacturing and research capacity. Over the decades, policy reforms, scientific institution-building, entrepreneurship and global integration transformed the sector. The 1970 Patents Act encouraged domestic process innovation, while the 1991 economic reforms opened global markets. COVID-19 further highlighted India’s role in global healthcare and strengthened the focus on supply-chain resilience and innovation.

Today, India is the “pharmacy of the world”, but its next challenge is to become a global pharmaceutical innovation leader.

At independence, medicines were expensive, domestic manufacturing was limited, and most medicines, APIs and advanced formulations were imported. Indian firms lacked the technology, infrastructure and research capabilities needed to compete.

Nearly eight decades later, India is the world’s third-largest pharmaceutical producer by volume, supplies around 20% of global generic medicines and over 60% of global vaccine demand, with medicines reaching more than 190 countries (Department of Pharmaceuticals, 2025; PIB, 2026).

During the 1950s and 1960s, the government pursued pharmaceutical self-reliance through public-sector enterprises, scientific institutions and regulatory frameworks. Organisations such as CSIR supported research, while universities expanded pharmacy and chemical engineering education. However, strong product patent protection limited domestic manufacturing and contributed to high medicine prices. This growing need for reform eventually led to the landmark Patents Act of 1970, which fundamentally changed India’s pharmaceutical industry.

The law that changed Indian pharma forever: the 1970 Patents Act

Every successful industry has a defining moment. For Indian pharmaceuticals, that moment came in 1970, when Parliament enacted the Indian Patents Act. Before this, product patents gave pharmaceutical companies exclusive rights over medicines, while multinational firms dominated much of India’s drug market. Medicines were expensive, imports were high, and domestic companies had limited scope to develop their capabilities. The Ayyangar Committee had highlighted these concerns and argued for a patent system better suited to India’s developmental and public-health needs.

The biggest change was the shift from product patents to process patents for pharmaceuticals. In simple terms, Indian companies could manufacture the same medicine if they developed a different production process. This encouraged reverse engineering and, more importantly, process innovation. Indian chemists and engineers developed expertise in finding cheaper and more efficient ways to manufacture complex drugs. Companies such as Cipla, Ranbaxy, Lupin, Dr. Reddy’s Laboratories, Cadila and later Sun Pharma grew around this capability, focusing on affordable, large-scale production.

The impact went beyond business. Increased competition helped make medicines more affordable while reducing India’s dependence on imported drugs. By the late 1980s, India had developed a strong pharmaceutical manufacturing ecosystem and growing export capabilities. The 1970 reform therefore did not create a global pharmaceutical powerhouse overnight; it created the conditions for technological learning and domestic capability-building. When liberalisation opened global markets after 1991, these capabilities became the foundation of India’s emergence as the “pharmacy of the world.”

From the Indian market to global markets: liberalization and the export revolution (1991–2026)

India’s 1991 economic liberalization marked a turning point for the pharmaceutical industry. Greater exposure to global competition also opened new international markets. Indian companies began investing in quality systems, modern manufacturing facilities, international certifications and USFDA approvals. Firms such as Dr. Reddy’s Laboratories, Sun Pharma, Lupin, Aurobindo Pharma, Cipla and Zydus Lifesciences expanded into regulated markets including the US, Europe, Canada, Australia and Japan. India’s strength in process chemistry, large-scale production and cost-efficient manufacturing gave its generic medicines a strong competitive advantage. By 2026, Indian pharmaceutical products were reaching 191 countries, with around half of exports going to highly regulated markets such as the US and Europe.

Visionaries such as Dr. Yusuf Hamied of Cipla recognized that affordable medicines could become India’s competitive advantage. Rather than competing directly with multinational companies in expensive drug discovery programs, Indian firms focused on efficiency, scale, and process innovation.

Dr. Yusuf Hamied famously stated: “No one should be denied access to life-saving medicines because of price.”

This philosophy became a defining feature of India’s pharmaceutical identity.

The export numbers capture this transformation. Pharmaceutical exports increased from USD 1.9 billion in 2000–01 to USD 30.47 billion in 2024–25, representing nearly a 16-fold increase. Formulations and biological products account for nearly three-fourths of pharmaceutical exports, showing that India has moved beyond exporting basic ingredients towards supplying finished medicines (Pharmexcil,2025). Companies such as Sun Pharma, whose acquisition of Ranbaxy in 2014 strengthened its international presence, and Dr. Reddy’s Laboratories, with its focus on complex generics and biosimilars, demonstrate how Indian firms evolved into global pharmaceutical players.

India’s Global Position in Healthcare

India’s pharmaceutical industry has achieved global significance.

Table 1: India’s Position in the Global Pharmaceutical Industry

By the 2020s, India had become the third-largest pharmaceutical producer by volume, supplied around 20% of global generic medicines, and contributed over 60% of global vaccine supply (Department of Pharmaceuticals, 2025; PIB, 2026). This growing international role gave rise to the phrase “pharmacy of the world.” Indian medicines became important in treating diseases such as HIV/AIDS, tuberculosis, malaria, hepatitis and diabetes, particularly across developing countries. The industry had successfully moved from a protected domestic market to a globally integrated manufacturing powerhouse. But its growing global importance also created a new vulnerability—one that became particularly visible during the COVID-19 pandemic.

COVID-19, vaccine diplomacy, and the new pharmaceutical strategy (2020–2026)

The COVID-19 pandemic tested India’s pharmaceutical strength like never before. As global demand for vaccines and medicines surged, India’s manufacturing capacity became crucial to the international response. The Serum Institute of India scaled up COVID-19 vaccine production, while Bharat Biotech developed Covaxin. Through Vaccine Maitri, India supplied vaccines to more than 100 countries, turning pharmaceutical manufacturing into an instrument of global health cooperation and diplomacy. The pandemic further strengthened India’s reputation as the “pharmacy of the world.”

However, COVID-19 also exposed a major weakness: India’s dependence on imported Active Pharmaceutical Ingredients (APIs) and key starting materials, particularly from China. Estimates suggest that China accounted for around 65–70% of India’s API imports, raising concerns about supply-chain security (Department of Pharmaceuticals, 2025). This created a striking paradox: India was a major exporter of finished medicines while remaining dependent on foreign inputs. In response, the government introduced PLI schemes for pharmaceuticals and bulk drugs, along with bulk drug parks, to strengthen domestic API production and resilience.

The post-pandemic strategy therefore shifted from cost competitiveness towards resilience and innovation. Pharmaceutical exports reached USD 30.47 billion in 2024–25, despite global disruptions. Looking ahead, India must move beyond generics towards biologics, biosimilars, gene therapies, precision medicine and AI-enabled drug discovery. COVID-19 demonstrated that pharmaceuticals are not merely an export industry but a pillar of public health, economic resilience, technology and geopolitical influence.

The next frontier: from the pharmacy of the world to a global innovation leader

India’s pharmaceutical industry has reached a historic turning point. It has built one of the world’s largest generic medicine manufacturing ecosystems, developed globally competitive companies, and become a major supplier of affordable medicines and vaccines. But the next phase will be different. The first phase was about self-reliance, the second about global manufacturing competitiveness, and the third must be about innovation. India’s future will depend on its ability to move beyond generics towards new drug discovery, biologics, biosimilars, gene and cell therapies, precision medicine, digital health and AI-assisted drug development. While global pharmaceutical innovators often invest 15–25% of revenue in R&D, Indian firms have traditionally focused more on manufacturing efficiency and generic medicines.

The opportunity, however, is significant. Government estimates suggest that India’s pharmaceutical market could grow from around USD 60 billion to approximately USD 130 billion by 2030, driven by rising healthcare spending, an ageing population, expanding insurance coverage and global demand for affordable medicines (PIB, 2025). At the same time, China’s dominance in APIs and pharmaceutical intermediates remains a strategic challenge. Yet the global “China+1” strategy offers India an opportunity to attract investment and strengthen its position in global supply chains. Combining cost competitiveness with reliable regulation, quality manufacturing, domestic API production and stronger R&D could significantly increase India’s global pharmaceutical footprint.

Table 2: India’s pharmaceutical transformation (1947–2026)

The long-term transformation is clear India has moved from foreign-dominated markets to domestic leadership, limited manufacturing to global-scale production, and import dependence to pharmaceutical exports of USD 30.47 billion in 2024–25. Indian medicines now reach 190+ countries, while the country supplies around 20% of global generic medicines and plays a major role in vaccine manufacturing (Department of Pharmaceuticals; PIB; IBEF).

The journey from import dependence to export leadership has been remarkable. The challenge now is to convert manufacturing strength into scientific and innovation leadership ensuring that the “pharmacy of the world” also becomes a global centre for the medicines of tomorrow.

The broader lesson for India’s industrial policy

India’s pharmaceutical success shows that industrial transformation rarely comes from a single reform. It emerged through the combined impact of patent policy, scientific institution-building, entrepreneurship, export competitiveness, regulatory upgrading and state support. The 1970 Patents Act built domestic capability, the 1991 reforms opened global markets, and post-2020 policies have focused on resilience and innovation.

As India moves towards 2047, pharmaceuticals could become a major pillar of its developed-economy ambitions. India has already demonstrated its ability to manufacture medicines at scale.

The next challenge is more ambitious discovering new medicines, developing breakthrough therapies and leading biotechnology innovation. Stronger universities, R&D investment, industry–academia collaboration, venture capital and supportive regulation will be essential. The world already depends on India for affordable medicines; the future may depend on India for pharmaceutical innovation.

Conclusion

India’s pharmaceutical journey since 1947 is more than a story of industrial growth; it is a story of how public policy, scientific capability and entrepreneurship can reshape an entire sector. From a country heavily dependent on imported medicines, India has developed a globally competitive pharmaceutical industry whose products now reach more than 190 countries. The 1970 Patents Act created space for domestic capability, the 1991 economic reforms connected Indian companies with global markets, and post-pandemic policies have strengthened supply-chain resilience and strategic self-reliance.

Yet India’s success also presents a new challenge. Its strength has traditionally been affordable generic medicines and large-scale manufacturing. The next stage must focus on innovation, research and high-value pharmaceuticals. Greater investment in R&D, stronger university–industry partnerships, biotechnology, biosimilars, advanced therapies and domestic API production will be essential.

As India approaches 100 years of independence in 2047, the question is no longer whether it can manufacture medicines for the world it has already demonstrated that capability. The real question is whether India can help invent the medicines of the future.

The journey from import dependence to the “pharmacy of the world” is remarkable. The next journey from the pharmacy of the world to a global pharmaceutical innovation leader could be even more consequential.