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India's API industry at a key juncture, guided by global supply chain dynamics & shifting regulatory landscape
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Nandita Vijayasimha, Bengaluru
April 03 , 2025
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The active pharmaceutical ingredients (API) industry in the country is at a watershed moment, impacted by global supply chain dynamics, shifting regulatory landscapes, and the desire for self-reliance. Traditionally reliant on imports, especially from China, India has made significant strides in boosting its domestic API manufacturing capabilities, said Sreenivas Varma, Director, Americas, HRV Global Life Sciences.
The PLI (production linked incentive) scheme has spurred investments in critical APIs and key starting materials (KSMs), reducing our dependence on imports. This is a very strategic initiative because APIs are the lifeline of the pharma sector, and India supplies nearly 20% of the global API needs, he added.
However, even as there is advancement, raw material costs, environmental laws, and compliance are a few of the significant impediments. Companies that embrace newer process technologies, sustainability, and high-value API segments will be well positioned to succeed. The API industry in India stands at the threshold of a transformation with backward integration and reduced import dependence, growth in high-value, niche APIs, improved regulatory compliance and quality focus, sustainability & Green API manufacturing, digital & virtual API supply chain models, Varma told Pharmabiz in an email.
To combat supply chain risks, Indian API manufacturers are investing in the domestic production of intermediates and KSMs. This will reduce the reliance on imports and ensure a cost-competitive, stable supply chain. Some of the larger pharma players are establishing Greenfield API plants to enable this transition.
The market is moving away from commodity APIs to niche, high-margin segments like orphan & rare disease APIs with a growing focus on personalized medicine. Even peptides & biosimilars of high value, complex segments gaining traction. Besides, oncology APIs are growing in demand. Investment in these APIs with high barrier to entry can compensate investors with strong pricing power and longer-term growth, he noted.
As the US FDA, EMA, and WHO tighten regulatory oversight, compliance has become a differentiator. Indian API firms that focus on automation, digitalized quality management systems (QMS), and data integrity will be at an advantage. Adherence to Good Manufacturing Practices (GMPs) and excellent documentation will be crucial to achieve global market share. Working on Quality by Design (QbM) is going to be any area manufacturers should prioritise.
With increasing concern for the environment, API manufacturers must adopt concepts of green chemistry with a focus on friendly solvents and catalysts, reduce effluent generation and opt for low energy processes. It is here sustainable manufacturing investment will be rewarded with regulatory incentives and cost savings in the long run for industry players.
The traditional API business model is evolving. Virtual API companies, through technology-enabled sourcing, regulatory expertise, and global supply chain networks, are revolutionizing traditional manufacturing via reduced capital investment and enhanced efficiency.
Stating that HRV Global Life Sciences is 450+ product portfolio across oncology, rare diseases, and veterinary APIs Varma said it has already filed 10 DMFs and 5 CEPs within nine months, and aims to reach 100+ USDMFs/CEPs by 2028. As India’s API landscape evolves, HRV is leading the charge in global market expansion, regulatory excellence, and sustainable growth.
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