Pharma Companies Invest In US While India Still Depends On China For APIs
“For decades, India built its reputation as the “pharmacy of the world” by manufacturing low-cost generic medicines that reached millions across Africa, Latin America, and Asia. But now, the industry appears determined to move beyond the image of being merely a low-cost generic supplier,” said Ravi Uday Bhaskar, former Director General of Pharmexcil
Chennai: At a time when India’s PLI scheme has hardly lowered the country’s dependence on China for Active Pharmaceutical Ingredients (APIs), Indian pharmaceutical companies have committed $19.1 billion investments in the US during the SelectUSA Investment Summit 2026. Experts believe the Production Linked Incentive (PLI) scheme has largely benefited a handful of big firms, while MSME manufacturers — who could have helped India reduce import dependence — remain outside the purview.
Indian pharmaceutical companies announced plans to invest more than $19.1 billion in the United States, anchored by Sun Pharmaceutical’s planned $11.75 billion acquisition of New Jersey-based Organon & Co. Investing companies include Aurobindo Pharma, Biocon Group, Cipla, Dr. Reddy’s Laboratories, Glenmark Pharmaceuticals, Granules India, Jubilant Group, Lupin, Sun Pharmaceuticals, Piramal Pharma, and Zydus Lifesciences.
“For decades, India built its reputation as the “pharmacy of the world” by manufacturing low-cost generic medicines that reached millions across Africa, Latin America, and Asia. But now, the industry appears determined to move beyond the image of being merely a low-cost generic supplier,” said Ravi Uday Bhaskar, former Director General of Pharmexcil.
The current investment wave into the US is unlike anything seen before. Indian pharma companies have evolved from small domestic firms into multinational corporations with global ambitions. Out of the world’s top 20 generic drug companies, six are now from India.
The latest investments include major acquisitions and expansion plans focused on biologics, biosimilars, specialty medicines, and contract drug research and manufacturing. Companies are no longer looking only at generic drugs. They want access to regulated markets, advanced research ecosystems, and global supply chains.
The US generic drug market itself is estimated at over $115 billion, while Europe represents another massive opportunity. By manufacturing in the US, Indian firms can bypass several regulatory hurdles and trade barriers. A facility approved in the US gains easier recognition in Europe because of mutual recognition agreements between regulators. That reduces repeated inspections, lowers compliance delays, and allows companies to move products faster across markets.
However, the contrast between outbound investments and India’s continuing import dependence on China remains stark.
Despite the PLI scheme, India still imports nearly 70 per cent of critical APIs and key starting materials from China.
“The imports are more than $9 billion and it is growing by 7 per cent. Our export growth in FY26 was only 2 per cent. Out of $31 billion exports, our imports are $9 billion. So we are importing more than 30 per cent,” he said.
Bhaskar believes the PLI scheme should have been extended to MSMEs instead of concentrating incentives among large corporations. The criteria for incentives under the PLI scheme favours only the medium and large companies. Without broader participation and price competitiveness, India’s import dependence is unlikely to decline significantly.
