Sector snapshot
India is the third-largest producer of medicines by volume and supplies about a fifth of the world’s generics. Foreign capital is now going into APIs, biologics, contract manufacturing, devices and hospital chains. Exports, FDI and policy support are rising across pharma and medtech.
| Measure | Figure | Source |
|---|---|---|
| Pharmaceutical exports, FY2025-26 (approximate) | USD 31 bn | Commerce Ministry, via Business Standard |
| FDI equity into drugs and pharmaceuticals, FY2025-26 | USD 1.9 bn (USD 891 mn in FY2024-25) | DPIIT |
| Medical devices market | USD 11 bn, about 1.5% of the world market | Invest India estimate (retrieved 1 Oct 2026) |
| Projected domestic pharmaceutical market by 2030 | USD 130 bn (about USD 60 bn now) | Invest India; PIB |
Four developments shape the sector as of 1 October 2026:
- PLI capex is more than double the commitment. The 55 companies selected under the ₹15,000 crore pharma PLI had invested ₹40,890 crore by September 2025 against ₹17,274.96 crore committed; cumulative sales of ₹3.17 lakh crore beat the ₹2.94 lakh crore scheme target (DoP Annual Report 2025-26).
- Generics stay outside US Section 232 tariffs. From 29 September 2026 the US 100% tariff on specified patented medicines covers more companies. Generics and their ingredients are outside it; qualifying speciality medicines from India, one of 20 eligible jurisdictions, may get zero duty (Business Standard, 29 Sep 2026).
- Biologics and clinical trials are the next push. Budget 2026-27 announced Biopharma SHAKTI: ₹10,000 crore over five years for biologics and biosimilars, three new NIPERs, seven upgraded and over 1,000 accredited clinical-trial sites. Operating guidelines are awaited.
- Global capital is consolidating hospital chains. KKR agreed on 6 August 2026 to buy Medicover’s India hospital business for €1.2 billion (Reuters), and Aster DM completed its merger with Blackstone-backed Quality Care India on 2 July 2026, forming a 39-hospital group.
Where the opportunity is
Foreign investors are active in six parts of the health economy.
| Segment | What the sources say | Related schemes |
|---|---|---|
| Generic formulations for export | India supplies about 20% of the world’s generics and has the second-highest number of USFDA manufacturing plants after the US (Invest India). Output under the pharma PLI made up 26.5% of India’s formulation exports in FY2024-25. | PLI for pharmaceuticals; RPTUAS |
| APIs and key starting materials | Under the ₹6,940 crore bulk-drug PLI, 48 projects for 33 products are approved, with incentives of up to 20% of sales for fermentation-based products. Bulk drug parks are being developed in Gujarat, Andhra Pradesh and Himachal Pradesh. | PLI for bulk drugs; Bulk Drug Parks |
| Biologics, biosimilars and vaccines | India meets about 60% of global vaccine demand and has over 200 biosimilars in development (Invest India). Biopharma SHAKTI, announced in Budget 2026-27 with ₹10,000 crore over five years, targets domestic production of biologics and biosimilars. | Biopharma SHAKTI; BioE3 and Bio-RIDE |
| Contract manufacturing and capability centres (CDMO, R&D, GCCs) | Eli Lilly plans over USD 1 billion of contract manufacturing in India and a new manufacturing and quality presence in Hyderabad; Sanofi plans €400 million for its Hyderabad capability centre by 2030. Invest India ranks India the third most preferred clinical-trial destination. | PRIP; RDI Scheme; see the GCC hub |
| Medical devices | A market of about USD 11 bn (Invest India), expected to reach USD 50 bn by 2030. Exports rose from USD 2.5 bn in 2020-21 to USD 4.1 bn in 2024-25, and by September 2025, 194 manufacturers had land in the central device parks in Uttar Pradesh, Madhya Pradesh and Tamil Nadu. | PLI for medical devices; Medical Device Parks; Strengthening of the Medical Device Industry |
| Hospitals and medical value travel | India needs an additional 3.6 million hospital beds by 2034, says Invest India, and draws about 2 million foreign patients a year from 78 countries. Budget 2026-27 proposed five regional medical hubs built with private partners. | Regional medical value tourism hubs |
Sources: Invest India pharmaceuticals, medical devices, healthcare and AYUSH pages (retrieved 1 Oct 2026); DoP Annual Report 2025-26; PIB backgrounder, 2026; ANI, 6 Oct 2025; Sanofi, 17 Jul 2024; Budget speech 2026-27.
How ownership and licensing work in brief
Greenfield pharma, medical devices and hospitals are open to 100% foreign ownership on the automatic route. Brownfield pharma is automatic up to 74% and needs Government approval beyond that, with conditions on NLEM output and R&D spend. Health insurance and marketplace online pharmacy are also at 100% automatic, each with its own conditions. Any investor with a land-border-country beneficial owner above 10% or with control goes through the Government route.
Products need CDSCO or state licences. Devices are classed by risk from A to D; Class A and B manufacturing licences come from the State Licensing Authority and Class C and D from CDSCO. Importers hold a CDSCO import licence through an authorised Indian agent. Prices of scheduled formulations are controlled by the NPPA under DPCO 2013, and marketing to practitioners follows the Uniform Code for Pharmaceutical Marketing Practices 2024.
Guide to this hub
- Recent investments: the hospital buyouts and pharma capability bets of 2024 to 2026, as public examples.
- FDI rules: the full caps-and-routes table, including brownfield, insurance, online pharmacy and land-border conditions.
- Regulators and registrations: CDSCO, state licensing, NDCT Rules, revised Schedule M, NPPA and the marketing code.
- Central incentives: the three PLIs, the parks, device sub-schemes, RPTUAS, PRIP, Biopharma SHAKTI, RDI, BioE3 and the medical hubs, each with its status.
- State incentives: Telangana, Tamil Nadu, Karnataka, Maharashtra and Uttar Pradesh.
- Tax and zones: GST cuts of September 2025, customs relief, the parks and the corporate tax tables for tax year 2026-27.
- Set-up roadmap: nine sector steps plus the entry-vehicle and incorporation sequence.
- What to watch: the compliance watch-outs.
- Recent changes: what changed since 2025.
- Sources: the full reference list.
What to check next
- Confirm whether your target counts as greenfield or brownfield, and whether any beneficial owner is from a land-border country.
- Fix each product’s regulatory path: device risk class, new drug or generic, and whether it falls under DPCO 2013 ceiling prices.
- Check which central schemes are still open; the PLIs have selected their beneficiaries and the last PRIP call closed on 19 November 2025.
- Compare the five state packages and the central parks before choosing a site.
- Check US tariff exposure for any patented products you will export; generics stay outside the Section 232 tariff.