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PLI schemes, digital adoption, etc to transition India from generic powerhouse to innovation-driven hub: Experts
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Shardul Nautiyal, Mumbai
April 17 , 2026
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Production linked incentive (PLI) schemes, digital adoption, and global collaborative efforts are poised to transition India from a low-cost generic powerhouse to a resilient and innovation-driven hub. Success further depends on sustained policy execution, private investment with USD 4 billion+ already made, and ecosystem collaboration, experts inform. They further explain that this will lead to lower disruption risks, stronger global market share, and reliable access to affordable medicines globally.
The PLI scheme for bulk drugs (APIs/KSMs/drug intermediates), launched in 2020 with a Rs. 6,940 crore outlay incentivizes domestic manufacturing to reduce import dependence and build end-to-end capabilities. Complementary measures also include bulk drug parks, GMP upgrades, and PLI schemes for pharmaceuticals and medical devices (attracting Rs. 40,890+ crore in investments with significant employment generation).
“International partnerships, such as the India-US TRUST Initiative, aim to create trusted, diversified supply chains through technology transfer, joint R&D, and policy alignment. India is also positioning itself as a “China+1” hub amid global tariff pressures, attracting redirected investments from global pharma firms,” experts informed.
Several pharma companies and policymakers are adopting a dual approach: industrial scaling and digital transformation. Pharma manufacturers are now focussed on backward integration and supplier diversification. There is a focus on fermentation chemistry, complex synthesis, and KSM production via PLI-supported greenfield projects. It has been recommended to adopt multi-sourcing (China+1, near-shoring, and alliances with US, EU, and Indo-Pacific partners).
Industry experts explain that early PLI adopters have reported improved supply reliability, reduced price volatility, and faster compliance. India has shifted from a net importer to a net exporter of APIs in recent years (exports worth Rs. 41,500 crore vs. imports worth Rs. 39,215 crore). Strengthening the supply chain is essential to sustain growth toward the ambitious USD 130 billion target by 2030 and the long-term vision of a USD 450 billion industry by 2047, while safeguarding domestic access and reinforcing India’s position as a reliable global supplier.
The Indian pharma supply chain faces structural vulnerabilities. Indian pharma industry experts state that there has been over-dependence on China for APIs and KSMs. India imports 70%+ of its active pharmaceutical ingredients (APIs) and key starting materials (KSMs) from China, with even higher shares (up to 87%) for critical antibiotics and other categories. This creates single-point failure risks from geopolitical events, factory shutdowns, or export restrictions.
Among other key challenges, there also exists logistics and infrastructure gaps like fragmented cold-chain networks (90% non-standardized in some segments), higher logistics costs (15%+ premium), poor last-mile connectivity, and regional disparities in transit reliability. Cold-chain issues also compound and raise product integrity risks and costs.
It has been known that regulatory and compliance pressures like stricter GMP (Good Manufacturing Practice) norms disproportionately burden MSMEs (over two-thirds non-compliant in recent assessments). Quality control deficits and counterfeit risks have also added layers of complexity. Industry expert Vikas Nim further informs that broader risks also include geopolitical disruptions (e.g., West Asia conflicts), tariff volatility, long working-capital cycles, and limited visibility/traceability across multi-tier suppliers.
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