Question:
Explain the factors which contribute to the growth of India's pharmaceutical industry, with specific reference to its concentration in the western region of India
(UPSC 2025, Paper 2, Geography Optional PYQ)
Answer.
India’s pharmaceutical industry is one of the largest in the world, often called the “Pharmacy of the World.” It ranks 3rd globally by volume and 14th by value, contributing about 1.7% to India’s GDP and supplying over 20% of global generic medicines.
A notable geographical feature of this industry is its strong regional concentration in Western India, particularly in Gujarat and Maharashtra.
Factors Contributing to the Growth of India’s Pharmaceutical Industry:
1. Strong Policy Support & Regulatory Framework
The Indian Patent Act (1970) allowed process patents instead of product patents, enabling domestic firms to reverse-engineer drugs.
Government schemes such as:
Production Linked Incentive (PLI) Scheme
Bulk Drug Parks Scheme
Pharma Vision 2020
These policies strengthened domestic manufacturing and exports.
2. Availability of Skilled Human Resources
India produces a large number of pharmacists, chemists, and biomedical engineers.
Major institutions like NIPER, IITs, and pharmacy colleges support R&D and innovation.
3. Strong Domestic Market Demand
Rising population, increasing healthcare awareness, and medical insurance penetration drive demand.
India’s pharma market size crossed $50 billion in 2023 and is expected to reach $130 billion by 2030.
4. Export Orientation & Global Integration
India exports medicines to 200+ countries, including the USA, Africa, and Europe.
The US alone accounts for nearly 30% of India’s pharma exports.
5. Presence of a Robust Chemical Industry Base
Pharmaceutical manufacturing depends heavily on chemical inputs.
India’s strong chemical industry supports bulk drug production.
Why is the Pharmaceutical Industry Concentrated in Western India?
Western India — especially Gujarat and Maharashtra — forms the largest pharmaceutical cluster in India.
1. Historical Industrial Base
Gujarat has long been a chemical manufacturing hub.
Early industrialization led to the growth of pharmaceutical firms.
Example:
Ahmedabad is known as the “Pharma Capital of India.”
2. Availability of Raw Materials
Proximity to petrochemical industries ensures the supply of intermediates and bulk chemicals.
Regions like Ankleshwar and Vapi are major chemical clusters.
3. Excellent Port Connectivity
Western India has major ports like:
- Mumbai
- Kandla
- Nhava Sheva
These facilitate easy export of medicines.
4. Industrial Infrastructure & SEZs
The presence of pharma parks and Special Economic Zones reduces production costs.
Gujarat alone accounts for about 33% of India’s pharma production.
5. Favorable Business Environment
Investor-friendly policies and ease of doing business in Gujarat and Maharashtra attract pharma companies.
Examples of Major Pharma Hubs in Western India
- Ahmedabad – Zydus Lifesciences, Torrent Pharma
- Vadodara – Sun Pharma
- Mumbai – Cipla, Lupin
- Pune – Serum Institute of India (the largest vaccine producer globally)
Challenges Faced
- Heavy dependence on China for Active Pharmaceutical Ingredients (APIs)
- Environmental concerns from chemical waste
- Regulatory compliance issues in global markets
The growth of India’s pharmaceutical industry is driven by strong policy support, skilled manpower, export demand, and industrial infrastructure. Its concentration in Western India reflects historical industrial development, port connectivity, and a robust chemical base.
With continued investment in R&D, API self-reliance, and sustainable practices, India is poised to strengthen its position as a global pharmaceutical leader.
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