India challenges China’s dominance in pharmaceutical outsourcing market
NEW DELHI, INDIA — In a bold move to reshape the global pharmaceutical landscape, India is positioning itself as a formidable alternative to China in the lucrative drug services market.
As geopolitical tensions between China and the United States escalate, Indian contract development and manufacturing organizations (CDMOs) are seizing the opportunity to attract Western pharmaceutical and biotechnology clients.
Indian CDMOs are investing in infrastructure and training to attract Western pharmaceutical and biotechnology clients.
Despite concerns about India’s dependence on China for certain services, Indian firms are determined to establish themselves as credible competitors.
Geopolitical tensions drive supply chain restructuring
Sibaji Biswas, CFO of Syngene International, highlighted the strategic shift among large pharmaceutical clients.
“Large pharma clients are actively looking to restructure their supply chains to mitigate potential risks, especially after seeing the COVID-19 pandemic supply chain disruptions,” Biswas stated.
The U.S. Biosecure Act, a bill aimed at reducing reliance on Chinese service companies, has further fueled this shift. Although the bill has not progressed recently, its introduction has already led to increased business inquiries for Indian CDMOs.
Indian CDMOs experience surge in client interest
Indian CDMOs like Navin Molecular are experiencing a surge in client interest.
Jordi Robinson, Navin’s Chief Commercial Officer, said, “People are beginning to express concerns around China. They don’t want to move away from China fully but want a second source in India.”
To meet the rising demand, Navin is investing $35 million to expand its manufacturing capacity in Dewas, India. This expansion will support the commercial launch of new drugs and cater to clients seeking alternatives to China.
Challenges, opportunities for Indian pharmaceutical industry
Despite the promising outlook, challenges remain. India relies heavily on China for raw materials needed to produce active pharmaceutical ingredients (APIs).
Nailesh Bhatt, CEO of Vgyaan Pharmaceuticals, pointed out that while the Indian government encourages self-reliance, importing raw materials from China remains more cost-effective for many companies.
Roger LaForce, Managing Director of DorraPharma, emphasized the need for specialized capabilities in customized drug services. He also warned that while established Indian CDMOs may thrive, new entrants could face difficulties. Infrastructure issues, such as unpaved roads and bureaucracy, also pose challenges.
Despite these obstacles, Indian CDMOs are committed to becoming strong alternatives to China.
Robinson added, “We basically have to do everything that the Swiss CDMOs do, but at a low price. I think that’s the best way to kind of push the business in India.”
As India continues to develop its capabilities, it is poised to play a significant role in the global pharmaceutical outsourcing market.
Strategic investments fuel industry growth
Venture capital and private equity investments have picked up, with companies like Suven Pharmaceuticals merging with Cohance Lifesciences, owned by Boston-based Advent International.
This trend underscores the growing confidence in India’s potential to become a leading hub for pharmaceutical manufacturing and drug development services.
