FDI in pharma

Topic: Economy

Context:

FDI in pharma jumped53% in April-Sept. periodFY21 witnessed a 200% spurt: Survey.

Foreign direct investment (FDI) in the pharma sector in the first half (April-September) of this fiscal increased 53% to ₹4,413 crore from the year earlier.
The inflows continued to be buoyant, the Department of Economic Affairs said in the annual Economic Survey (2021-22) citing how FDI in pharmaceutical sector had witnessed a sudden spurt in 2020-21, showing a200% increase over the previous fiscal.
The extraordinary growth of foreign investments in pharma sector is mainly on account of investments to meet COVID-19 related demands for the rapeutics and vaccines.

Reasons for surplus:

In the section on pharmaceuticals, the government said the country was the largest supplier of generic medicines with a 20% share in the global supply.
Price competitiveness and good quality were two factors behind Indian medicines producers becoming dominant players in the global market.
The Indian pharmaceutical industry ranks third in the world in pharmaceutical production by volume.
During 2020-21, pharma exports totalled $24.4 billion, while pharma import stood at $7 billion, there by generating a $17.5 billion trade surplus.

Scenario of Indian pharma industry:

India enjoys an important position in the global pharmaceuticals sector, as India is the largest provider of generic drugs globally.
The Indian pharmaceutical industry meets over 50% of global demand for various vaccines, 40% of generic demand in the U.S. and 25% of all medicine in the U.K.
Presently, over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.
In 2020, India is expected to be amongst the top three pharmaceutical markets in terms of incremental growth.
The Indian pharmaceuticals market is the world’s third-largest in terms of volume and thirteenth-largest in terms of value. It has established itself as a global manufacturing and research hub.
India has one of the lowest manufacturing costs in the world – lower than that of the U.S. and almost half of the cost in Europe.