The year 2025 marked a turning point for the Indian pharmaceutical industry, as years of strategic investments in drug innovation began to yield tangible results. For decades, the sector has been known as a global leader in generic drug manufacturing and vaccine production. However, 2025 witnessed a shift, with Indian companies demonstrating their growing capabilities in novel drug discovery and development. This transformation is underpinned by a combination of factors, including strategic collaborations, supportive government policies, the embrace of advanced technologies like artificial intelligence (AI), and a growing emphasis on research and development.
One of the most significant indicators of this shift was the increasing number of deals and regulatory approvals secured by Indian firms for innovative drugs. In July 2025, Glenmark Pharmaceuticals grabbed headlines with a \$700 million out-licensing agreement with AbbVie for an under-development cancer drug. This deal was one of the largest of its kind for an Indian drugmaker, highlighting the growing confidence in the innovative capabilities of the Indian pharma sector. Wockhardt Ltd. also exemplified this trend with its new antibiotic, Zaynich, receiving acceptance for its New Drug Application by the U.S. Food and Drug Administration (FDA). This drug targets multi-drug resistant infections, addressing a critical global health need.
Several factors catalyzed this innovation surge. Government initiatives like the Promotion of Research and Innovation Programme (PRIP) and a \$12 billion R&D fund provided crucial financial support to incentivize innovation and encourage calculated risk-taking. These policies addressed longstanding capital constraints and undervaluation challenges faced by the industry. Moreover, the industry's increasing reliance on AI, automation, and advanced analytics has accelerated drug discovery and development processes. Indian firms are adopting in silico drug discovery platforms that use AI to analyze molecular structures, predict drug-target interactions, and identify promising drug candidates swiftly. This approach saves time and reduces costs significantly. Minister of State for Science and Technology Jitendra Singh stated that India will rely on generative AI to accelerate drug discovery and bolster clinical research.
The Indian pharmaceutical market is currently valued at \$55 billion and is expanding at over 10% annually, with projections exceeding \$100 billion by 2030. This growth is driven by rising global demand, innovative drug launches, and government support. The industry is also witnessing a surge in private equity investments and M&A activity, averaging over \$3.5 billion annually. This sustained financial engagement underscores the industry's resilience and its ability to attract significant capital, even amid economic uncertainties.
Looking ahead, the Indian pharmaceutical industry is poised for continued growth and innovation. The focus is shifting from volume to value, with companies investing in next-generation therapies, digital transformation, and regulatory agility. Strategic collaborations are also playing a crucial role, fostering innovation and expanding market reach. As India strengthens its regulatory framework and embraces advanced technologies, it is well-positioned to become a global hub for pharmaceutical innovation, driving advancements in healthcare and improving patient outcomes worldwide.
