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India’s pharmaceutical supply chain continues to rely heavily on Chinese imports: NITI Aayog
Jun-24-2026

A government think tank NITI Aayog in the eighth edition of its Trade Watch Quarterly report has said that India’s pharmaceutical supply chain continues to rely heavily on China, with around 65 per cent of critical Active Pharmaceutical Ingredients (APIs) and key starting materials being imported from China. It noted that that stricter environmental compliance norms have led to a significant increase in manufacturing and research costs for domestic pharmaceutical companies.

The report also pointed out that a weak innovation and commercialisation ecosystem have created uncertainty for innovators and long-term investments. To strengthen the sector’s global competitiveness, it recommended greater diversification into high-value pharmaceutical segments. It further emphasized the need for improved regulatory transparency and stronger industry-academia collaboration within life-sciences clusters to accelerate patent commercialisation, foster research collaboration, and support startup incubation. 

The report further stated that India remains a leading supplier of affordable generic medicines worldwide, catering to nearly 50 per cent of Africa’s, 40 per cent of the United States’, and 25 per cent of the United Kingdom’s generic drug requirements. Globally, demand for pharmaceuticals reached $1.02 trillion in 2025, while the API market stood at $261 billion, taking the total drugs and pharmaceuticals market to nearly $1.3 trillion. Meanwhile, the report reveals that India’s overall trade expanded by 5.4% year-on-year to $1.84 trillion in the fourth quarter of FY26, underlining the resilience of the Indian economy despite a challenging global trade environment. 


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