Global value chain reconfiguration to help India reach its $60b healthcare innovation opportunity by 2028

Overseas drugmakers lessen overdependence on China, benefitting Indian CDMOs.

Healthcare innovation in India is poised to double and become a $60b market by 2028 as the country’s contract manufacturing sector gains attention from global drugmakers shifting their focus away from China, according to a report by Bain & Company and HealthQuad. 

In a 6 March report, Bain & Company and HealthQuad highlighted India’s reputation as the world’s second-largest contract development and manufacturing organization (CDMO) player currently, after China.

The growth was accelerated by the ongoing China+1 strategy of major multinational pharmaceutical companies, and further boosted by the country’s robust workforce with 1.8 million science graduates as well as the higher number of US FDA-approved manufacturing plants in India compared to China.

“For decades, the Indian healthcare industry has been a trailblazer in innovating low-cost services and products for both Indian and global markets,” Bain & Company and HealthQuad said. “Addressing key ecosystem issues will be critical to unlock the next wave of growth.”

Having grown by 45% over the last three years to become a $16b market in 2023, Pharma services, including CDMOs, will continue to dominate healthcare innovation and maintain its 50% market share of the overall healthcare innovation in India by 2028. 

“The CDMO segment saw the highest growth, driven by global supply chains shifting away from China and improvement in capacity, capability, and quality by Indian players,” the report stated. “Pharma IT also showed robust growth, led by growing global price pressures and demand for omnichannel transformation.”

Health tech follows closely behind as the segment is projected to account for a third of the innovation market in the next four years. Vaccine and biotech (10-12%) and Medtech (8-10%) are still in their nascent stages of growth and will make up for the remainder.

Beyond manufacturing, the report said the rising consumerisation of health and the country’s deepening expertise in science and technology will also help drive the growth in healthcare innovation. 

Support from regulators and the international community will also be key to realising the $60b opportunity in the coming four years.

The healthcare innovation market was estimated at $30b in 2023 and made up 15% of India’s entire $180m healthcare market. By 2028, India’s healthcare industry is projected to grow at an annual compound rate of 10-12% to $320b.