FOREIGN DIRECT INVESTMENT IN INDIA'S PHARMACEUTICAL INDUSTRY: GROWTH, INNOVATION, AND GLOBAL COMPETITIVENESS

Authors:

Kajal Sharma, Dr. Manoj Kumar

Keywords:

Pharmaceutical sector, FDI inflows and regulatory framework.

Abstract:

The Indian pharmaceutical industry has undergone significant transformation since the enactment of the Indian Patent Act in 1970. Liberalization in the 1990s further enabled Indian enterprises to expand into global markets, positioning the sector as the third-largest in the world by volume and fourteenth by value. Foreign Direct Investment (FDI) has played a crucial role in shaping this growth, with policies permitting 100% FDI in greenfield projects and 74% automatic approval in brownfield projects. Despite the industry's impressive expansion, there remain research gaps in understanding FDI's impact on post-pandemic recovery, specific sub-sectors such as biologics and contract research, and its contribution to research and development (R&D) and intellectual property generation. Additionally, the effectiveness of government policies in attracting sustainable investments and India's competitive positioning in global pharmaceutical markets remain underexplored. This research aims to analyze the interplay between FDI and the pharmaceutical industry's growth, GDP contribution, and global competitiveness through a literature review and quantitative analysis of secondary data. Findings highlight FDI’s role in driving innovation, technology transfer, and market expansion, while also identifying key challenges that need to be addressed. Insights from this study can aid policymakers, industry stakeholders, and investors in formulating strategies to enhance the sector’s sustainability and growth.

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