India shipped $30.47 billion worth of pharmaceuticals in FY24-25. That makes it the third-largest producer by volume globally, though only fourteenth by value. The gap between those two rankings tells you everything about India's position in pharma outsourcing: massive scale, competitive pricing, and a value proposition that keeps pulling global buyers in.
But the numbers alone don't tell you what it's actually like to outsource pharma manufacturing or development to India. This guide breaks down the real picture -- costs, capabilities, risks, and the specific companies and models worth knowing about.
The India Pharma Industry by the Numbers
India's domestic pharma market hit $50 billion in FY23-24. That's significant, but the export story matters more for anyone considering outsourcing. The country has over 1,300 FDA-registered manufacturing facilities. Of these, 663+ are registered for Active Pharmaceutical Ingredients (APIs) and 395+ for Finished Dosage Forms (FDFs).
No other country outside the US has that many FDA-registered facilities. Not even close.
The cost advantage is real but often overstated. Indian manufacturing runs roughly 33% cheaper than the US on average. Raw materials account for about two-thirds of API production costs. But here's the catch most people miss: India imports 70-80% of its Key Starting Materials (KSMs) and intermediates from China. That dependency shapes everything -- from pricing stability to supply chain risk.
The CDMO Market: Where the Growth Is
If you're looking at India for outsourcing, the Contract Development and Manufacturing Organization (CDMO) segment is where the action is. Bain & Company pegged India's CDMO market at $18 billion in 2023, projecting it to reach $44 billion by 2030 and $150-155 billion by 2047.
McKinsey's numbers are more conservative but still impressive. They estimate India could capture 8-10% of the global CDMO market by 2033, in a market they size at $465 billion. Even the low end of that range means $37 billion in CDMO revenue flowing into India.
The China+1 trend is accelerating this. Global pharma companies reported a 50% year-over-year surge in RFPs directed at Indian CDMOs in 2024. The US Biosecure Act, which restricts contracts with certain Chinese biotech firms, has been a major driver. Companies that used to source everything from China are now actively splitting their supply chains.
Top CDMOs You Should Know
Not all Indian CDMOs are created equal. Here's who actually matters and why.
| Company | Key Strength | Notable Detail |
|---|---|---|
| Syngene International | Integrated R&D + manufacturing | BMS partnership since 1998, extended to 2035. ~700 dedicated scientists for BMS alone. |
| Piramal Pharma | Global CDMO with 15 facilities | Strong in antibody-drug conjugates (ADCs) and high-potency APIs. |
| Divi's Laboratories | Custom synthesis, API manufacturing | Among the largest custom synthesis players globally. Backward-integrated. |
| Laurus Labs | APIs + formulations | CDMO revenue grew 49% YoY in FY25. Aggressive capacity expansion. |
| Jubilant Pharmova | Radiopharmaceuticals, CDMOs | US and Canadian facilities give them a dual-shore model. |
| Gland Pharma | Sterile injectables specialist | One of the few Indian companies with deep sterile injectable CDMO capability. |
| Biocon / Biocon Biologics | Biosimilars and biologics | Among the most advanced Indian players in large-molecule CDMO services. |
Syngene's BMS relationship is worth studying. It started in 1998 as a small research services contract. Nearly three decades later, BMS has roughly 700 Syngene scientists dedicated to its programs, and the partnership was extended to 2035. That kind of longevity is rare in pharma outsourcing and says a lot about what's possible when the relationship works.
Laurus Labs is the growth story to watch. A 49% year-over-year jump in CDMO revenue during FY25 signals that global sponsors are increasingly comfortable sending complex work to Indian CDMOs beyond just generic API manufacturing.
If you're looking for a CDMO partner in India, you can search our manufacturer directory to filter by capabilities, certifications, and location.
India vs. China: The Real Comparison
This comes up in every sourcing conversation, so let's be specific about it.
India dominates downstream: finished dosage formulations, generics, and increasingly, biosimilars. China dominates upstream: APIs, intermediates, KSMs, and bulk chemical manufacturing. These aren't competing positions -- they're complementary ones, and that's exactly why India's dependence on Chinese raw materials is so hard to unwind.
| Factor | India | China |
|---|---|---|
| Strength | Formulations, generics, biosimilars | APIs, intermediates, KSMs |
| FDA-registered facilities | 1,300+ | ~800 |
| Raw material costs | 25-30% higher than China | Lower (scale + petrochemical integration) |
| English proficiency | Strong across industry | Variable, improving |
| IP framework | Product patents since 2005 | Improved but enforcement gaps |
| Regulatory risk | Stable, democratic system | Policy unpredictability |
India's raw material costs run 25-30% higher than China's. That gap comes from China's vertically integrated chemical industry and massive economies of scale in basic chemistry. India has tried to close this gap through PLI (Production Linked Incentive) schemes -- Rs 6,940 crore allocated for bulk drugs and Rs 15,000 crore for formulations -- but these are long-term plays that won't reshape the cost structure overnight.
The practical takeaway: if you need APIs or intermediates at rock-bottom prices and geopolitics isn't a concern, China is still hard to beat. If you need formulations, finished products, or a manufacturing partner in a country with strong English proficiency and a legal system that global pharma companies are comfortable with, India is the obvious choice.
India vs. Bangladesh: A Less Obvious Comparison
Bangladesh comes up more often than you'd expect in outsourcing discussions, especially for generic formulations.
Here's the deal: Bangladesh meets 98% of its domestic pharmaceutical demand through local manufacturing. That sounds impressive until you learn that the country imports 95% of its APIs. Bangladesh's pharma industry is essentially a formulation-only play, entirely dependent on external API supply -- mostly from India and China.
Bangladesh has also benefited from Least Developed Country (LDC) status, which grants a TRIPS waiver allowing local manufacturers to produce patented drugs without licensing fees. That waiver was set to expire around 2026. Once it does, Bangladeshi manufacturers will face the same patent constraints as Indian ones, and a major cost advantage disappears.
For outsourcing purposes, India offers a far deeper supply chain. You can source the API, get the formulation developed and manufactured, handle regulatory submissions, and manage clinical trials -- all within the same country. Bangladesh can't match that breadth.
Engagement Models: Picking the Right Structure
How you structure your outsourcing relationship matters as much as who you pick. Here are the main models used in Indian pharma outsourcing.
Fee-for-Service (FFS)
You define the scope, the CDMO quotes a price, you pay on delivery milestones. Clean and simple. Works well for defined projects like method development, stability studies, or specific manufacturing campaigns. The downside: you're in a transactional relationship, and you won't be the priority when capacity gets tight.
Full-Time Equivalent (FTE)
You rent dedicated scientists or manufacturing staff at a monthly rate. Common in discovery chemistry and analytical services. Syngene's BMS deal started as an FTE model. The advantage is continuity -- you get the same people working on your projects month after month. The risk is that you're paying whether they're productive or not.
Build-Operate-Transfer (BOT)
The Indian partner builds a facility or capability to your specs, operates it for a defined period, then transfers ownership to you. This is gaining traction with large pharma companies that want Indian operations but don't want to handle greenfield construction and regulatory setup themselves. It's expensive and complex but gives you full control eventually.
Licensing and Supply Agreements
You license your product to an Indian manufacturer who produces and potentially markets it in agreed territories. Common for generics companies entering the Indian or broader emerging-market landscape. Your upside is royalty income without capital commitment. Your risk is quality and brand control.
Strategic Partnerships
Long-term, multi-project relationships with shared risk and investment. Think Syngene-BMS or the kind of deal where you co-invest in a new manufacturing line for a specific product. These take years to build but deliver the most value when they work. Most companies that have been outsourcing to India for a decade or more have moved to this model for their critical programs.
Intellectual Property: What You Need to Know
India's IP environment for pharma is workable but distinctly different from the US or EU. You need to understand the specifics.
India has recognized product patents since 2005, when it amended its patent law to comply with TRIPS. Before that, only process patents were available, which is how India's generics industry was built. The current law provides 20-year patent terms, same as everywhere else.
The unique provision is Section 3(d) of the Indian Patents Act, which prevents patents on new forms of known substances unless they show significantly enhanced therapeutic efficacy. This is the anti-evergreening clause. Novartis fought it all the way to the Supreme Court over Glivec (imatinib) in 2013, and lost. The provision remains law.
India does not offer data exclusivity. In the US and EU, even after a patent expires, generic companies can't reference the originator's clinical data for a set period. India has no such provision, which means generics can enter faster once a patent expires or is not granted.
Compulsory licensing has been used exactly once: in 2012, when the Indian Patent Office granted Natco Pharma a compulsory license to manufacture Bayer's Nexavar (sorafenib) for kidney cancer. Bayer was charging Rs 2.8 lakh per month; Natco was authorized to sell at Rs 8,800. No compulsory license has been issued since, and the Indian government has generally signaled it won't use this tool liberally.
For outsourcing, the practical risk is low if you have strong contracts. Use Indian counsel, specify governing law, include clear IP ownership clauses, and consider arbitration in Singapore or London for dispute resolution.
Quality: The Issue Nobody Wants to Talk About
Here's where the honest conversation needs to happen. India has a quality problem. Not an insurmountable one, but a real one.
The FDA issued 105 warning letters to Indian pharmaceutical facilities in FY2024. India's pass rate on FDA inspections -- defined as NAI (No Action Indicated) or VAI (Voluntary Action Indicated) outcomes -- stands at approximately 87%. Compare that to Europe at 98%. That 11-percentage-point gap represents a significant number of facilities where inspectors found problems serious enough to require corrective action.
Data integrity is the number-one issue, and it has been for years. This means falsified records, backdated test results, or cherry-picked data from analytical instruments. It's not universal, but it happens at enough facilities that the FDA made data integrity the focal point of its India inspection program.
What does this mean for buyers? Due diligence isn't optional. You need to audit before you contract, audit during production, and have the contractual right to audit whenever you want. Check the FDA inspection database for any facility you're considering. Look at the last three inspection outcomes, not just the most recent one. A facility that got an OAI (Official Action Indicated) two years ago and a VAI last year is on an upward trajectory. A facility with three consecutive VAIs might have persistent problems it can't fully resolve.
You can search our directory to find manufacturers with verified certifications and then cross-reference their regulatory history.
Cold Chain and Logistics: The Hidden Cost
If you're outsourcing temperature-sensitive products -- biologics, certain APIs, vaccines -- India's cold chain infrastructure will be a factor in your cost model.
India's cold chain pharmaceutical logistics market was valued at $0.57 billion in 2024. That's small for a country of India's size. The broader issue is that logistics costs in India run 13-14% of GDP, versus 7-8% in developed economies. That premium eats into the manufacturing cost advantage.
Major cities -- Mumbai, Hyderabad, Ahmedabad, Bangalore -- have adequate cold chain infrastructure. Tier-2 and Tier-3 cities, where many API and intermediate plants are located, often don't. If your product needs 2-8 degree C storage and transport, factor in the cost of validated cold chain from the manufacturing site to the airport, not just the manufacturing cost itself.
Government Incentives: PLI and Beyond
India's government wants more pharma manufacturing. The Production Linked Incentive (PLI) schemes back that up with real money.
Rs 6,940 crore (approximately $830 million) has been allocated for bulk drug manufacturing. This targets APIs and KSMs where India is currently dependent on China. The goal is to build domestic production capacity for 53 critical bulk drugs.
Rs 15,000 crore (approximately $1.8 billion) has been allocated for pharmaceutical formulations. This incentivizes high-value products like complex generics, biosimilars, and products with limited competition.
These schemes matter for outsourcing because they're driving capacity expansion. New greenfield facilities coming online under PLI will need utilization, and CDMO contracts are a natural way to fill capacity. If you're planning to outsource in the next two to three years, PLI-funded facilities may offer competitive pricing as they ramp up.
How to Actually Get Started
If you're seriously considering Indian pharma outsourcing, here's a practical sequence.
- Define your scope clearly. "We need a CDMO" isn't a brief. "We need a GMP-certified facility capable of manufacturing 50 million oral solid dosage units per year of a Schedule H drug, with EU-GMP certification and capacity to handle controlled substances" -- that's a brief.
- Shortlist 5-8 facilities. Use our manufacturer directory to filter by certification, dosage form, and location. Cross-reference with FDA inspection data.
- Send an RFI, not an RFP. Start with a Request for Information to understand capabilities before you invest time in a full RFP. Ask for recent inspection outcomes, client references (anonymized is fine), and capacity utilization rates.
- Audit in person. A virtual tour is not an audit. Fly to India, walk the plant floor, talk to the QA head without management present if possible. One day at the facility tells you more than six months of email exchanges.
- Start with a pilot batch. Don't commit to a five-year supply agreement based on promises. Run a pilot or validation batch first. Evaluate quality, communication, and timeline adherence on a small scale before scaling up.
- Build in quality agreements from day one. Don't retrofit these. Your Quality Agreement should specify analytical methods, release criteria, change control procedures, and deviation handling before the first batch starts.
If you need to connect with multiple manufacturers quickly, submit a quote request and we'll match you with relevant suppliers.
What's Coming Next
Three trends will shape Indian pharma outsourcing over the next five years.
Biologics CDMO capacity is expanding fast. Companies like Biocon, Syngene, and Enzene (a Strides subsidiary) are investing heavily in mammalian cell culture and microbial fermentation capacity. India's share of global biologics CDMO is currently small -- under 5% -- but the infrastructure build-out is real.
The US Biosecure Act will keep pushing work from China to India. Even if the act gets watered down in implementation, the signal is clear: US buyers want supply chain diversification. Indian CDMOs that can demonstrate quality and reliability will benefit disproportionately.
Digital and data capabilities are becoming differentiators. Indian CDMOs that can offer real-time batch monitoring, electronic batch records, and AI-assisted process optimization are winning mandates over competitors that are still running paper-based systems. This is where the next round of competitive advantage will come from.
India isn't perfect. The quality gaps are real, the infrastructure limitations are real, and the China raw-material dependency is a genuine risk. But for companies willing to do proper due diligence and build real relationships, the value proposition is hard to beat. No other country offers India's combination of scale, cost, regulatory familiarity, and English-speaking technical workforce.
The question isn't whether to outsource to India. It's how to do it well.