India’s Contract Research, Development, and Manufacturing Organisation (CRDMO) sector is on the brink of a major expansion, with estimates projecting a market size of ₹1,91,070-2,17,125 crore (US$ 22-25 billion) by 2035. A recent Boston Consulting Group (BCG) and Innovative Pharmaceutical Services Organisation (IPSO) report attributes this growth to cost advantages, rapid project initiation, and increasing expertise in biologics, solidifying India’s position as a global pharmaceutical innovation hub.

A Rapidly Expanding CRDMO Market

With a compound annual growth rate (CAGR) of 15%, India’s CRDMO sector is set to outpace global growth trends. The demand for advanced therapies, including antibody-drug conjugates (ADCs), DNA and RNA therapeutics, and gene therapy, is fueling expansion, as global pharmaceutical companies seek alternative manufacturing hubs due to supply chain realignments.

Currently, India holds a 2-3% share of the ₹12,15,900-12,59,325 crore (US$ 140-145 billion) global CRDMO market, representing an ₹86,850 crore (US$ 10 billion) opportunity. As Western pharmaceutical firms look to diversify supply chains, India’s strong cost competitiveness, skilled workforce, and advanced manufacturing capabilities position it as a key player in pharmaceutical outsourcing and innovation.

Key Growth Drivers for India’s CRDMO Sector

Several factors are propelling India’s CRDMO sector forward, including:

• Global Supply Chain Diversification: Companies are looking to reduce dependence on single-country supply chains, benefiting India.
• Pharmaceutical Pricing Pressures: Policies like the Inflation Reduction Act (IRA) in the U.S. are encouraging offshoring to cost-efficient destinations.
• Rise of Biologics and Advanced Therapies: India’s capabilities in biotech, cell and gene therapy, and high-value pharmaceuticals are expanding.
• Government Support and Investment: The Indian government has allocated ₹25,000 crore (US$ 2.88 billion) to boost pharmaceutical and biotech innovation.

Challenges to Overcome for Sustained Growth

Despite the positive outlook, India’s CRDMO sector must address several key challenges to unlock its full potential, including:

• Expanding the Talent Pool: A six- to sevenfold expansion in skilled professionals is required by 2035 to meet growing industry demands.
• Faster Regulatory Approvals: Streamlining drug approval processes and improving regulatory efficiency will be crucial.
• Strengthening Tier-I Supplier Base: A robust supplier network is essential to enhance production capacity and efficiency.
• Increasing Capital Access: Greater investment in research and infrastructure will drive long-term growth.
• Enhancing ESG Compliance: Sustainable practices must be prioritized to align with global standards.

India’s CRDMO Sector and the Role of IPSO

To strengthen India’s position in the global pharmaceutical value chain, 11 leading Indian CRDMO firms have launched the Innovative Pharmaceutical Services Organisation (IPSO). This initiative aims to:

• Accelerate talent development in pharma research and manufacturing.
• Streamline industry policies for faster approvals and better market efficiency.
• Improve the supplier ecosystem to enhance productivity.
• Expand capital access to drive research and innovation.
• Enhance sustainability by adopting eco-friendly practices.

The Road Ahead for India’s CRDMO Sector

India’s pharmaceutical and biotech industries are on track to become global leaders, with CRDMO expansion playing a pivotal role in this transformation. With strategic investments, policy support, and a focus on innovation, India is poised to become a hub for pharmaceutical research, development, and high-end manufacturing by 2035.

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