India’s pharmaceutical industry, one of the nation’s most vital sectors, is expected to post 7–9% revenue growth in FY26, according to a new report by ICRA. The sector, which supplies affordable medicines to more than 200 countries, continues to expand, though not without challenges.
While the domestic market remains strong due to rising healthcare awareness and government initiatives, the international landscape is proving more complex. The U.S. market, which accounts for nearly one-third of India’s pharma exports, is facing pricing pressures and regulatory hurdles. Consolidation among U.S. distributors has reduced pricing power for Indian generic manufacturers, making growth difficult in this critical market.
Leading Indian firms such as Sun Pharma, Dr. Reddy’s, and Cipla are addressing these challenges by investing in research and development, specialty drugs, and biosimilars. Diversification into new therapeutic areas and innovations in product pipelines are becoming central strategies.
Despite headwinds, the long-term outlook remains positive. India’s cost-efficient manufacturing, growing global demand for affordable medicines, and increasing adoption of new therapies support continued expansion.
Analysts believe that while near-term revenue growth may be moderate, the sector’s fundamentals are strong. To sustain momentum, companies will need to balance compliance, innovation, and global competitiveness while navigating U.S. market risks.