The Indian pharmaceutical industry is set to grow by 13.5 per cent in the next three years and the booming domestic pharma outsourcing market is expected to see a compound annual growth rate (CAGR) of 37.5 per cent, said a new study released by US-based research firm Boston Analytics.

The study also forecasts the domestic market to reach $10.3 billion by 2010. Factors crucial to the growth will be internal demand for drugs because of the country’s increasing population, an ever-expanding consumer base in the middle and upper income brackets, the need for improved healthcare infrastructure and Indian companies’ reverse-engineering skills.

India also possesses 75 FDA-approved pharmaceutical plants — the largest number located in any country outside the United States. The report titled “An Introduction to the Indian Pharmaceutical Industry” estimates India’s pharmaceutical outsourcing market will hit $3.3 billion in the next two years.“In the last few years, a lot of attention has been paid to the rapid growth of the software and manufacturing sectors in India. However, other industries are taking off in the region,” said Boston Analytics CEO & Co-founder Rashid Bilimoria.

Rapid growth

A recent CII-KPMG report had estimated the Indian industry to grow at a CAGR of 16 per cent over 2007-11. According to a McKinsey report, the Indian pharmaceutical market is set to grow from $6.3 billion in 2005 to $20 billion by 2015, with a growth rate of 12.3 per cent.

Meanwhile, in another study the BCG pointed out that the market capitalisation of the Indian manufacturing sector could rise up to $520-billion by FY 15, while the Indian manufacturing sector has the potential to rank amongst the top 3 to 5 manufacturing economies globally by FY 35, said BCG study “Breakthrough Value Creation for Indian Manufacturing”.