India’s Pharma Market Growth Outlook for FY26: Key Trends and Future Projections

India’s Pharma Market Set for Steady Growth in FY26: A Deep Dive

The Indian pharmaceutical industry is poised for steady growth, with projections indicating an 8-9% year-on-year (YoY) expansion in FY26. As one of the fastest-growing sectors, the pharma industry continues to thrive on increasing demand, innovation, and export-driven momentum.

Projected Growth in the Pharma Market

According to the latest report by India Ratings and Research (Ind-Ra), the pharmaceutical sector is expected to grow by 7.5-8.0% YoY in FY25, marking a rise from 6.5% YoY growth in FY24. However, this remains lower than the 9.9% YoY growth seen in FY23, indicating a slight slowdown but still maintaining a positive trajectory.

In February 2025, the market registered a 7.5% YoY revenue growth, primarily driven by:

• Price growth: 5.2% YoY
• New product launches: 2.4% YoY
• Volume growth: Remained slightly negative at -0.2% YoY

Despite muted volume growth, the 12-month rolling sales (Moving Annual Total - MAT) surged by 8.1% in February, reinforcing the sector’s resilience.

Key Drivers of Pharma Market Growth

1. Strong Demand for Chronic Therapies

   • Cardiac therapies saw 10.8% growth in MAT and a 13.7% increase in monthly market share.
   • Other high-performing segments included gastroenterology, neurology/CNS (Central Nervous System), and dermatology.

2. API & Biotech Expansion

   • India is rapidly expanding its capabilities in Active Pharmaceutical Ingredients (APIs) and biotechnology, growing at 8% CAGR, which is twice the global average.

3. Rising Exports

   • Indian pharmaceutical exports have grown by 9% in 2024, nearly double the global average, further strengthening the country’s position as the world’s largest supplier of generic medicines.

4. Innovation & New Product Launches

   • With an increase in new drug launches, the market is witnessing a steady expansion, contributing to revenue growth.

Challenges in the Pharma Industry

While the industry is on a growth trajectory, some areas faced weaker demand in February 2025, particularly:

• Anti-infectives
• Respiratory therapies
• Gynecology segment

These sectors saw a slowdown in market expansion, indicating shifting healthcare trends and changing consumer demand patterns.

Future Outlook: What’s Next for India’s Pharma Industry?

The future of India’s pharmaceutical market remains promising, with a projected 8-9% YoY growth in FY26. The sector is expected to benefit from:

• Increased government support for domestic manufacturing.
• Continued expansion of the biopharmaceutical and vaccine sectors.
• Growing investments in research and development (R&D).
• Strengthening global exports, further cementing India's dominance in the generic medicines market.

Conclusion

India’s pharmaceutical industry is on an upward trajectory, fueled by rising demand, innovation, and expanding global influence. While certain segments may face short-term challenges, the overall outlook remains strong, positioning India as a key global player in the pharmaceutical and healthcare sectors. As FY26 approaches, the industry is expected to continue its growth momentum, reinforcing its crucial role in the global healthcare landscape.