India’s CDMO market to double to US$14 bn by 2028

India’s CDMO market is projected to double from US$ 7 billion to US$ 14 billion by 2028, driven by strong API and generic drug manufacturing capabilities, along with cost advantages over China.

India’s Contract Development and Manufacturing Organization (CDMO) market is on track for substantial expansion, projected to double from US$ 7 billion to US$ 14 billion by 2028, capturing “4-5% of the global market,” according to a BCG report. This growth is fueled by India’s strong presence in Active Pharmaceutical Ingredients (API) and generic drug manufacturing, along with cost advantages over China.

Several Indian CDMOs have reported a 50% year-on-year increase in Requests for Proposals (RFPs) in 2024, as global pharmaceutical firms seek to reduce dependence on China. India’s pharmaceutical services are 20% lower than their Chinese counterparts, making them a cost-effective alternative.

The biopharmaceutical sector is shifting toward innovative drug modalities, which are expected to outpace traditional small-molecule drugs in the coming years. Key emerging therapies include Cell and Gene Therapy, projected to grow at 45% CAGR, Antibody-Drug Conjugates (ADCs), expected to expand at 25% CAGR and Nucleic Acid Therapeutics, forecasted to grow at 36% CAGR.

With the global CDMO market for new drug modalities expected to reach US$ 20 billion by 2028, Indian CDMOs are emerging as major players due to several key factors:

Cost advantage: India offers significantly lower research and development (R&D) and manufacturing costs compared to many other countries, particularly China. This cost efficiency is a crucial advantage for pharmaceutical firms facing increasing pressure to diversify supply chains and reduce reliance on China. Lower operational expenses, affordable raw materials, and government incentives further strengthen India’s position as an attractive hub for contract manufacturing.

Skilled workforce: India is home to a vast pool of highly skilled and well-educated professionals in the pharmaceutical and biotechnology sectors. The country produces a steady stream of scientists, researchers, and engineers specializing in drug development, biopharmaceuticals, and cutting-edge therapeutic modalities. This strong talent base enables Indian CDMOs to maintain high-quality standards while fostering innovation in pharmaceutical manufacturing.

Operational experience: Indian CDMOs have built a robust track record of successful operations, supplying high-quality pharmaceutical products to global markets. Many of these facilities hold approvals from international regulatory bodies, including the US Food and Drug Administration (USFDA), the European Medicines Agency (EMA), and the World Health Organization (WHO). India’s extensive experience in regulatory compliance and its ability to meet stringent global quality standards make it a trusted partner for multinational pharmaceutical companies.

Trade between India and the US is projected to increase by US$ 102 billion between 2022 and 2033, while US-China trade is expected to decline. India and the broader APAC region are witnessing strong growth across multiple healthcare sectors. Pharmaceuticals are projected to grow at 9% CAGR over the next five years, MedTech at 8% CAGR, Digital Health at 9% CAGR, and Diagnostic Services at 6% CAGR.

The broader Asia-Pacific (APAC) healthcare sector is also expanding rapidly, with Foreign Direct Investment (FDI) in healthcare doubling since 2008. The APAC healthcare market is projected to reach US$ 5 trillion by 2030, contributing 40% to global healthcare growth. Rising income levels are driving this expansion, with the number of high-income households (earning USD 30,000+ annually) in Asia set to grow fivefold, from 34 million in 2000 to 175 million by 2030.

With strong capabilities in CDMO, biopharmaceuticals, and healthcare services, India and APAC are well-positioned to become global leaders in healthcare innovation and manufacturing.