Why Buyers Prefer Contract Manufacturing Services from India’s Pharma Sector

Why Buyers Prefer Contract Manufacturing Services from India’s Pharma Sector
15th, May 2025

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More and more buyers are turning to contract manufacturing services from India’s pharmaceutical industry, and it’s easy to see why. This trend is helping to cement India’s status as a global powerhouse in pharmaceutical manufacturing and outsourcing. Let’s dive into the key reasons driving this change:

1 Cheaper Production Costs:

  • Lower Production Costs: India has a substantial cost advantage in pharmaceutical manufacturing due to cheaper labour costs, competitive land prices, and lower overhead expenses compared to many wealthy countries. This allows purchasers to make significant savings on their production costs.
  • Economies of scale: Indian contract manufacturers frequently have large facilities and efficient processes, which allow them to provide competitive prices for bulk production.
  • Lower R&D Costs: Because skilled scientific talent is more readily available in India, conducting research and development there can be more cost-effective.

2. Strong Manufacturing Capabilities and Infrastructure:

  • Large Number of Manufacturing Units: India has over 10,000 pharmaceutical manufacturing units and over 3,000 drug businesses, offering a diverse variety of production capabilities across various dosage forms (tablets, capsules, injectables, syrups, etc.).
  • Advanced Technology and Equipment: Numerous Indian contract manufacturing organizations (CMOs) are equipped with cutting-edge technology and adhere to international manufacturing standards.
  • Specialized Expertise: Indian manufacturers bring extensive experience and technical know-how to the table, adept at handling a variety of formulations and manufacturing processes.

3. High Quality Standards and Regulatory Compliance:

  • Stringent Quality Control Measures: Indian CMOs are placing a strong emphasis on implementing rigorous quality control measures at every stage of the manufacturing process, from raw material testing to finished product analysis.
  • Compliance with International Standards: A significant number of Indian pharmaceutical companies meet global regulatory standards, such as Good Manufacturing Practices (GMP) set by the World Health Organization.
  • Focus on Certifications: Many firms have international certifications such as ISO 9001 and other related certifications, indicating their dedication to quality management.

4. Skilled and Abundant Workforce:

  • Vast Pool of Scientific and Technical Manpower: India has a vast pool of trained and competent individuals in pharmacy, chemistry, and related subjects, providing access to the expertise required for pharmaceutical manufacturing and research.
  • English-Speaking Workforce: The significant number of people who speak English makes it easier to communicate and collaborate with international buyers.

5. Established the Generic Manufacturing Hub:

  • Leading Generic Medication Producer: India is the world’s largest supplier of generic pharmaceuticals by volume, accounting for a sizable portion of worldwide generic medication exports. Because of their competence in generic manufacturing, Indian CMOs are a popular choice among corporations wishing to develop off-patent pharmaceuticals.
  • Experience with Complex Therapies: Indian companies have produced medications for a variety of therapeutic areas, including oncology, HIV, and other complex treatments.

6. Government support and initiatives:

  • Favourable Policies: The Indian government has enacted policies to assist the expansion of the pharmaceutical industry, such as allowing 100% Foreign Direct Investment (FDI) under the automatic route in greenfield projects.
  • Promotion of Research and Development: Government efforts promote research and development in the pharmaceutical business.
  • National Institutes: Premier institutes, such as the National Institute of Pharmaceutical Education and Research (NIPER), help to build a trained workforce and improve the industry.

7. Scalability & Flexibility:

  • Capacity to Meet Large Demands: Indian CMOs frequently have the ability to scale up production to meet the large volume requirements of overseas buyers.
  • Customized Solutions: Many manufacturers provide customized manufacturing solutions that cater to their clients’ specific formulation, packaging, and other requirements.

8. Strategic Location with Global Reach:

  • Access to Emerging Markets: India’s geographical location allows it to get into the growing pharmaceutical markets in Asia, Africa, and other emerging regions.
  • Built Export Network: Indian pharmaceutical businesses have built networks to export medications to more than 200 nations around the world.

To summarise, buyers prefer contract manufacturing services from India’s pharmaceutical sector because of a powerful combination of cost-effectiveness, robust manufacturing capabilities, adherence to quality standards, a skilled workforce, government support, and the ability to scale production, making India a dependable and competitive partner in the global pharmaceutical supply chain.

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