India’s Rise as a Global CDMO Powerhouse

India’s Contract Development and Manufacturing Organization (CDMO) market is experiencing a record growth trajectory, driven by a confluence of favorable factors, including cost advantages, technological advancements, and a strong regulatory framework. As per various research findings released in 2025, India’s CDMO market is expected to expand from US$15.63 billion in 2023 to US$44.63 billion by 2029. A report from the Boston Consulting Group (BCG), released February 2025, says the sector is poised to secure a 4-5 percent share of the global CDMO market, strengthening India’s position as a preferred outsourcing hub for pharmaceutical manufacturing and development.

India’s CDMO sector: Competitive advantage and rising demand

Offering pharmaceutical services priced around 20 percent lower than those of Chinese competitors, India has emerged as a highly attractive destination for drug development and manufacturing. The growing confidence in India’s pharmaceuticals manufacturing capabilities is also fueled by its robust infrastructure, adherence to global regulatory standards, and extensive talent pool.

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The BCG report notes that in 2024, some Indian CDMOs witnessed a 50 percent year-on-year surge in Requests for Proposals (RFPs), as global pharmaceutical companies sought to diversify their supply chains and mitigate risks associated with over-reliance on China.

Emerging drug modalities and market expansion

The country’s pharmaceutical industry is moving beyond the production of conventional generics and active pharmaceutical ingredients (APIs) to focus on complex and innovative drug modalities. India is increasingly investing in research and development (R&D) for cutting-edge therapies such as:

• Cell and gene therapy: Expected to grow at a CAGR of 45 percent, positioning India as a critical player in regenerative medicine.
• Antibody-drug conjugates (ADCs): With a projected CAGR of 25 percent, ADCs are gaining traction for targeted cancer therapies.
• Nucleic acid therapeutics: This segment, including RNA-based treatments, is anticipated to expand at a CAGR of 36 percent.

According to Fortune Business Insight, the global CDMO market size was valued at US$242.62 billion in 2024 and projected to grow to US$465.14 billion by 2032, exhibiting a CAGR of 8.5 percent during the forecast period. Meanwhile, the BCG report projects the value of the global CDMO market for new drug modalities to reach US$20 billion by 2028.

Either way, industry watchers are optimistic that India and other Asian players will emerge as key contributors to the global CDMO market, offering scalable and cost-effective solutions to meet the increasing demand for specialized drug development.

India vs. China: A shifting landscape in CDMO

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China has long dominated the CDMO sector due to its large-scale API production, cost-effective labor, and strong government support. However, geopolitical tensions, trade restrictions, and COVID-related disruptions have led pharmaceutical companies around the world to reconsider their dependence on China.

In a post-pandemic era, India has emerged as a strong alternative for bulk drug manufacturing, offering advantages such as regulatory compliance. According to reports published in June 2024, India has around 650 USFDA-approved plants, constituting a quarter of all such facilities outside the United States. This is due to cost efficiency, with manufacturing expenses significantly lower than in Western countries and about 20 percent cheaper than China; and a skilled workforce, with a large pool of English-speaking scientists and professionals facilitating collaboration with global pharmaceutical firms.

The global CDMO market is expected to grow exponentially in the coming years, with India positioned to capture a significant share of this expansion. According to a global market report, while the U.S. remains the largest CDMO market, valued at US$54.21 billion in 2023, India’s faster growth rate is positioning it as a future leader in the industry.

Source: PharmaSource

*Note: The forecast suggests India CDMO market size is projected to reach US$44.63 billion by 2029, growing at a CAGR of 14.67 percent during the forecast period (2024-2029).

Major investments driving CDMO growth in India

Several leading CDMO firms in India are making sizable investments to enhance their capabilities and expand their service offerings. For instance, Aurigene Pharmaceutical Services, a subsidiary of Indian pharmaceutical major Dr. Reddy’s, has established a biologics facility in Hyderabad’s Genome Valley (Telangana state) to manufacture therapeutic proteins, antibodies, and viral vectors. This facility operational since June 2024, provides integrated clinical research-to-commercial manufacturing services.

On January 17, 2024, it was reported that Aragen Life Sciences, a global Contract Research, Development, and Manufacturing Organization (CRDMO), is investing INR 20 billion (US$230.5 million) in Telangana to expand its presence in drug discovery, development, and manufacturing.

Indian multinational pharmaceutical company Divi’s Laboratories, a key API supplier, is developing a three-unit project within a 500-acre manufacturing facility in Kakinada, Andhra Pradesh. With the commencement of commercial operations under Phase I, covering 200 acres in January 2025, the company has solidified its role in intermediate and custom synthesis solutions.

Hyderabad-headquartered multinational pharmaceutical and biotechnology company Laurus Labs is undergoing an INR 9.9 billion (US$114.1 million) expansion, shifting from API research to antiretrovirals and intermediates, with 60 percent of its revenue generated from the U.S. and European markets. Another Telangana-based pharmaceutical company, Jubilant Pharmova, has committed US$370 million to double its sterile injectable capacity in Spokane and Montreal, reinforcing its position for growth in North America.

Central government policy and strategic investments in CDMO industry

India’s central government has played a pivotal role in bolstering the CDMO industry within the drug manufacturing segment through targeted incentives and policy frameworks. Notable initiatives include:

• Production Linked Incentive (PLI) scheme: With a budget outlay of INR 150 billion (US$1.72 billion) for the promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/drug intermediates (DIs) and APIs, the scheme aims to augment domestic drug production and reduce import dependency.
• Bulk drug parks PLI scheme: The central government has allocated INR 69.4 billion (US$799.9 million) to promote self-reliance in API and bulk drug manufacturing within the country.

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Meanwhile, the pharmaceuticals sector has attracted US$23.48 billion in foreign direct investment from April 2000 to September 2024, highlighting the confidence of global investors in the industry.

Private equity investments are also driving growth, with major deals including Advent International’s INR 95 billion (US$1.09 billion) acquisition of Suven Pharmaceuticals to strengthen its CDMO capabilities, Goldman Sachs’ INR 24 billion (US$276.6 million) investment in Aragen Life Sciences to boost innovation and capacity expansion, and Carlyle’s strategic stake in Piramal Pharma, aimed at enhancing its end-to-end manufacturing capabilities.

Challenges and outlook

Despite India’s strong momentum in drug manufacturing, several challenges must be addressed to sustain long-term growth in the CDMO sector. The country still lags in large-molecule biologics production, requiring further investments in infrastructure and expertise. Building trust and credibility with global pharmaceutical companies is essential, necessitating consistent quality assurance and regulatory compliance.

Additionally, expanding R&D and manufacturing facilities to handle complex drug modalities is critical for future competitiveness. However, with substantial investments, a skilled workforce, and continued government support, India is well-positioned to become a dominant force in global pharmaceutical manufacturing. If present growth momentum continues, India could potentially surpass China in the CDMO space, reshaping the future of global healthcare and biotechnology.

Conclusion

India’s CDMO sector is undergoing a remarkable transformation, driven by strong policy support, increasing investments, and a strategic shift toward high-value biologics. The country’s ability to offer cost-effective and regulatory-compliant pharmaceutical services is attracting global players, ensuring its continued rise in the global pharmaceutical ecosystem. As the sector evolves, India’s role as a preferred CDMO industrial hub is set to strengthen, solidifying its position as a powerhouse in global drug development and manufacturing.

(US$1 = INR 86.75)

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