NITI Aayog Report Highlights Growth Potential in Pharma Exports

The latest edition places special focus on India's pharmaceutical industry, which has become one of the country's most globally competitive sectors.

NITI Aayog Vice-Chairman Ashok Kumar Lahiri has released the latest edition of the Trade Watch Quarterly for the fourth quarter of FY 2025-26, providing an overview of global and domestic trade developments and examining opportunities in India's pharmaceutical sector. Released in New Delhi in the presence of NITI Aayog's leadership and senior officials, the publication notes that India's external trade remained resilient despite ongoing geopolitical tensions and economic uncertainty across major global markets.

According to the report, India's total merchandise and services trade expanded by 5.4 percent year-on-year during FY 2025-26, reaching $1.84 trillion. Exports increased by 4.2 percent while imports grew by 6.5 percent, reflecting continued engagement with international markets. Services remained a major strength for the economy, with exports rising by 9 percent during the fourth quarter and maintaining a strong trade surplus.

India also retained its position as the world's eighth-largest services exporter in 2025, with services exports recording an average annual growth rate of 10.3 percent over the last decade, well above the global average.

Pharmaceutical Industry Identified as Strategic Growth Sector

The latest edition places special focus on India's pharmaceutical industry, which has become one of the country's most globally competitive sectors. India is widely recognised as a leading supplier of generic medicines and a major producer of vaccines and essential drugs. The report notes that global demand for pharmaceutical products and Active Pharmaceutical Ingredients (APIs) is estimated at around $1.3 trillion in 2025.

India exported pharmaceutical and API products worth $35.8 billion during the period under review, reinforcing its importance within global healthcare supply chains. The analysis found that India's export success remains concentrated in formulations, particularly generic medicines and retail pharmaceutical products, where the country has built a strong international presence.

At the same time, the report points to significant growth opportunities in emerging segments such as biologics, immunological products and advanced therapeutics, areas where India's participation remains relatively limited.

Opportunities for Innovation and Higher Value Production

The publication highlights the need for greater investment in research, innovation and advanced manufacturing to strengthen India's position in high-value pharmaceutical markets. It also notes that while India has improved its capabilities in specialised chemical intermediates and certain APIs, dependence on imported raw materials, particularly from China, remains a challenge for supply chain resilience.

Telangana, Gujarat and Maharashtra were identified as the leading centres of pharmaceutical production and exports, supported by strong industrial ecosystems, established manufacturing clusters and favourable policy environments.

Speaking at the release, Lahiri said India's future trade growth will depend on expanding export diversification while strengthening domestic capabilities in strategic sectors. He noted that the pharmaceutical industry illustrates both India's existing strengths and its future opportunities. Moving into innovation-led segments, expanding domestic production of critical inputs and improving market access in key destinations will be essential for the next phase of growth.

The report concludes that continued investment in technology, skills development, research and regulatory efficiency can help India strengthen its role in global pharmaceutical value chains and emerge as a leading centre for pharmaceutical manufacturing and innovation.