Indian Pharma Industry Projects Resilient Growth Amid US Challenges

Despite ongoing challenges in the US market, India's pharmaceutical industry is gearing up for solid revenue growth of 7-9% in FY26, largely driven by domestic and European markets. Key factors include enhanced rural distribution, new product launches in the domestic sector, and increased R&D investments.

India's pharmaceutical industry anticipates a robust revenue increase of 7-9% in FY26, even as the US market poses challenges. This was reported by the rating agency ICRA in its recent sector outlook.

ICRA attributes the growth momentum primarily to an 8-10% expansion in the domestic market and a 10-12% gain in Europe, with a moderation to 3-5% growth in the US, following a nearly 10% rise in FY25.

Kinjal Shah, Senior Vice President & Co-Group Head of ICRA, highlighted that domestic market factors such as sales force expansion, improved medical representative productivity, deeper rural penetration, and new product launches will support the robust growth forecast.

According to ICRA, government initiatives like GST exemptions and cuts in select lifesaving drug rates will aid in improving healthcare affordability. Conversely, the US market outlook remains cautious due to ongoing FDA scrutiny and pricing pressures.

Despite the complexities, Indian pharmaceutical companies are increasing R&D investments towards developing complex molecules and specialty products, as evidenced by the projected 10-12% revenue growth in Europe for FY26. The recent imposition of tariffs by the US, although pharmaceuticals are currently exempt, poses a significant risk to future export dynamics.