Why global pharma is betting on India’s next-generation CDMOs

For years, India’s appeal as a contract development and manufacturing destination rested largely on cost competitiveness.

For years, India’s appeal as a contract development and manufacturing destination rested largely on cost competitiveness. That advantage remains relevant, but the proposition has evolved. Global pharmaceutical companies increasingly look to India for the technical capabilities, regulatory discipline and manufacturing reliability required to deliver complex medicines at scale.

Pharma (Photo: Freepik - For representation purpose only)

The growth opportunity is substantial. A BCG-IPSO analysis estimates that India’s contract research, development and manufacturing organisation (CRDMO) sector could expand from $3–3.5 billion in 2024 to $22–25 billion by 2035. Rising outsourcing, supply-chain diversification and a maturing innovation ecosystem are expected to drive this expansion.

Outsourcing is also becoming more strategic. William Blair’s analysis found that 65% of FDA approvals in 2025 involved outsourced finished-dose manufacturing, the highest proportion in its 11-year dataset. Pharmaceutical companies increasingly expect partners to contribute development expertise, technical problem-solving and dependable commercial execution—not simply manufacturing capacity.

This shift is pushing Indian CDMOs beyond conventional active pharmaceutical ingredients (APIs) into peptides, antibody-drug conjugates (ADCs), oligonucleotides, biologics, high-potency APIs, sterile injectables and drug-device combinations. India has a strong foundation for this transition: The Department of Pharmaceuticals reports more than 262 US FDA-compliant manufacturing plants outside the US, reflecting substantial experience serving regulated markets.

Equally important is the talent base. India's capabilities span process chemistry, scale-up, analytical development, quality assurance, regulatory affairs and commercial manufacturing. These competencies have been built through decades of supplying demanding global markets. However, the next phase will require significant investment in people. BCG estimates that the sector's workforce may need to grow six- to seven-fold by 2035, alongside improvements in quality and productivity.

Manufacturing infrastructure is evolving accordingly. Modern CDMOs are investing in multi-product, multi-modality facilities, single-use bioreactors, intensified production platforms, automation, flow chemistry, electronic batch records and advanced process controls. These technologies can improve operational efficiency, consistency and scalability, provided they are supported by robust quality systems and process expertise.

A stronger domestic ecosystem also supports this transition. Global equipment suppliers increasingly provide local installation, qualification, calibration and technical services, while Indian manufacturers supply equipment across conventional and specialised dosage forms. Improvements in transport and logistics further strengthen the reliability of domestic manufacturing and international distribution.

The China+1 strategy adds momentum, but it does not fully explain India's opportunity. Global pharmaceutical companies are seeking diversified sourcing, operational resilience and technically capable partners rather than simply replacing one low-cost location with another. William Blair's observations from CPHI Milan indicate that customers are often adding alternative suppliers rather than exiting China. Increasingly, they also value integrated partnerships that combine development, analytical support, scale-up, clinical supply and commercial manufacturing, reducing technology-transfer delays and execution risks.

The next competitive frontier is, therefore, co-innovation. Indian CDMOs must move beyond executing established processes to contributing to development strategy, solving complex manufacturing challenges and supporting products throughout their lifecycle.

India has the industrial base, scientific talent and regulatory experience to compete for this opportunity. Capturing it will depend on sustained investment in advanced capabilities, workforce development, uncompromising quality and long-term customer relationships. Global demand creates the opening; technological depth and earned trust will determine who succeeds.

(The views expressed are personal)

This article is authored by Jatin Gajjar, Chief Technology Officer, Senores Pharmaceuticals Limited.