India’s pharmaceutical sector is undergoing a paradigm shift, from a generics-focused manufacturing hub to a powerhouse of innovation. At the heart of this transformation is a potent combination of biotechnology and research & development (R&D), which is enabling Indian pharma firms to move up the global value chain.
This shift is not just incremental, it’s disruptive. With breakthroughs in biosimilars, novel drug delivery systems, vaccine development, and cutting-edge treatments like gene therapy, India’s pharmaceutical landscape is embracing a new era of science-led growth. As global health priorities evolve, the country is positioning itself not just as the ‘pharmacy of the world,’ but also as a cradle of next-generation therapeutic innovations.
The Strategic Role of R&D in Pharma’s Evolution
Historically, India’s strength in pharmaceuticals stemmed from its ability to reverse-engineer and mass-produce generic drugs at low cost. But the demands of a post-pandemic world, coupled with increased competition, stricter regulations, and the rise of personalised medicine, have necessitated deeper investment in R&D.
Today, top-tier pharmaceutical companies in India are allocating 5–10% of revenue towards R&D, up from just 2–3% a decade ago (BioSpectrum India).
A recent initiative, the ₹5,000 crore Promotion of Research and Innovation in Pharma-MedTech (PRIP) scheme, is expected to unlock ₹17,000 crore in additional R&D funding by 2025 (Economic Times).
Some notable examples include:
● Sun Pharma’s R&D push in ophthalmology and specialty drugs.
● Dr. Reddy’s focuses on biosimilars and complex generics.
● Biocon’s leadership in monoclonal antibodies and insulin biosimilars.
India’s pharma R&D is no longer just about cost advantage; it’s about competitive innovation.
Biotech: The New Frontier in Indian Pharma
Biotechnology is playing a pivotal role in reshaping India’s pharmaceutical future. With the rise of biologics, drugs made from living organisms, biotech capabilities have become indispensable.
India’s biotech startup ecosystem has grown from around 50 in 2014 to over 11,000 by mid-2025 (PIB).
The country’s bioeconomy grew from USD 10 billion in 2014 to USD 165.7 billion in 2024, now contributing ~4.25% of India’s GDP (PIB).
Between 2021 and 2023, the number of biotech startups rose by 59%, and life sciences startups raised USD 1.9 billion across 465 deals (Omnivore Report).
Government support through BIRAC includes ₹299 crore committed to 88 startups, with ₹1,172 crore invested as of April 2024 (BIRAC Annual Report).
Additionally, India’s strength in vaccine development came to the fore during COVID-19. Companies like Bharat Biotech and Serum Institute of India showcased the country’s capacity to rapidly innovate, scale, and export biotech solutions to the world.
Connecting Academia, Startups, and Big Pharma
One of the defining features of this new wave of innovation is collaboration. Indian pharma firms are increasingly forging partnerships with academic institutions, startups, and global corporations. These alliances help:
● Speed up clinical trials and product validation.
● Share risk in new molecule development.
● Tap into emerging areas like artificial intelligence in drug discovery.
Incubators like C-CAMP (Centre for Cellular and Molecular Platforms) and research hubs like IISc Bangalore are actively nurturing deep-science startups that feed into the pharma pipeline.
During Global Bio-India 2024, 11 new biotech products were launched by startups, and several large calls for proposals were announced under government schemes like i4 and PACE (PIB).
These intersections between research, entrepreneurship, and manufacturing are making pharma companies in India globally competitive and innovation-driven.
Challenges Along the Innovation Curve
Despite promising developments, several hurdles remain:
● Long R&D cycles and high failure rates can deter smaller firms.
● Regulatory harmonisation with global standards is still evolving.
● Access to early-stage funding for biotech startups remains limited.
● Talent gaps in niche areas like bioinformatics and computational biology.
India’s PLI (Production Linked Incentive) scheme for pharma offers up to USD 2 billion in incentives through FY 2028–29, helping reduce the innovation risk for early-stage ventures (Omnivore Report).
Yet, with continued policy support, PLI (Production Linked Incentive) schemes, and stronger IP frameworks, India’s pharma innovation ecosystem is expected to mature rapidly.
Why It Matters for India’s Global Health Diplomacy
India’s leadership in affordable generic drugs has already had a profound impact on global public health, especially in low- and middle-income countries. By shifting focus to R&D and biotech innovation, Indian pharmaceutical firms are now contributing to cutting-edge therapies at a fraction of the global cost.
India supplies over 60% of global vaccine demand and accounts for ~40% of the generic drugs used in the U.S. (India Briefing).
This innovation-led positioning strengthens India’s voice in global healthcare diplomacy. Whether it’s supplying vaccines to Africa or developing oncology biosimilars for global markets, India’s pharma sector is increasingly being seen as a strategic global health ally.
Lighting the Path Ahead
The future of Indian pharma lies in its ability to blend affordability with advanced science. The transition is well underway. Indian pharmaceutical companies are no longer just suppliers; they are creators, researchers, and global innovators.
The industry is expected to grow from USD 50–58 billion today to USD 120–130 billion by 2030, and could reach USD 400–450 billion by 2047 (India Briefing).
As India eyes a $130 billion pharmaceutical market by 2030, the focus on R&D and biotech will determine how sustainably and inclusively that growth unfolds.
The journey from generics to genomics is reshaping how India heals and how the world sees India.