According to a report by CRISIL, India’s formulation increased by 18 per cent and its bulk drug exports surged by 9 per cent during the first half of financial year 2020-21 compared to the same period the previous year. The preceding fiscal saw the exports of formulation rising by 11 per cent and that of bulk drug contracting by 1 per cent.
The report attributed the spike in demand for pharma products boosting exports to the aftereffects of Covid-19 pandemic and hoarding of supplies by some nations in the wake of production disruptions.
The increased demand for active pharmaceutical ingredients (APIs) from India is the result of increasing customer diversification away from China and some countries adopting a ‘China plus one’ policy, according to the report. The bigger markets such as the US and Europe have led to export growth due to increased demand for drugs. Furthermore, several Indian players have also inked agreements with Gilead Sciences to manufacture and export Remdesivir.
The research stated that Chinese supply disruptions in early 2020 and persistent quality issues provide opportunities for Indian players as customers look at India as an alternative supplier of bulk drugs. Further, Indian API exporters have been able to garner good realizations on their exports during first half of FY21. Exporters of both formulations and bulk drugs are likely to help players maintain 7-8 per cent on-year growth this fiscal.
Meanwhile, the gradual easing of lockdown restrictions, coupled with demand for pharma products and bulk drugs in both exports and domestic markets, is expected to aid revenue growth. In addition, a ramp-up in specialty products and biosimilar exports, along with strong domestic sales will likely aid revenue growth in the next fiscal too.
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