New Delhi, Feb 26: India’s Contract Research Development and Manufacturing Organisation (CRDMO) sector is on the verge of a significant expansion, with projections estimating a growth to USD 22-25 billion by 2035, according to a joint report by Boston Consulting Group (BCG) and Innovative Pharmaceutical Services Organization (IPSO).
Currently, India accounts for 2-3% of the global CRDMO market, valued at USD 140-145 billion. However, the report highlights India's potential to emerge as a global leader in this sector, driven by four key factors:
- Supply Chain Diversification: Companies worldwide are looking to de-risk supply chains, making India a preferred outsourcing hub.
- Global Pricing Pressures: Policies like the Inflation Reduction Act (IRA) are encouraging offshoring to cost-competitive destinations like India.
- Demand for Advanced Therapeutics: The rising need for Antibody-Drug Conjugates (ADCs), gene therapy, and RNA therapeutics is boosting India's specialized CRDMO capabilities.
- R&D Investments: Increased funding in research and infrastructure is strengthening India’s innovation ecosystem.
Challenges Hindering Growth
Despite its promising trajectory, the report identifies five key hurdles that must be addressed for sustained expansion:- Talent Shortage: The sector requires a 6-7x expansion in skilled professionals by 2035.
- Regulatory Bottlenecks: Accelerating approval processes will be crucial.
- Supplier Base Strengthening: A stronger Tier 1 supplier ecosystem is needed to reduce reliance on imports.
- Investment Constraints: 4-5x more capital investment is required, but high costs and limited funding pose challenges.
- ESG Compliance: India's Environmental, Social, and Governance (ESG) standards still lag behind Western benchmarks.
Industry Leaders Weigh In
Vikash Agarwalla, Managing Director & Partner at BCG, emphasized that India's CRDMO industry is at the beginning of a major growth cycle."India's strengths in small molecule expertise, cost advantages, and a rapidly evolving innovation ecosystem position it as a global CRDMO powerhouse. However, unlocking this potential demands coordinated efforts from both industry and policymakers," Agarwalla stated.
He further stressed the need for strategic investments in infrastructure, talent development, and policy simplifications to establish India as the global innovation and manufacturing hub for the pharmaceutical industry.
With the right interventions, India’s CRDMO sector could not only increase its market share significantly but also establish itself as a key player in the global pharma supply chain in the coming decade.
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