India Pharma’s new resilience mantras
As geopolitical disruptions, increasing ESG pressures and shifting supply chains become the new normal, Indian pharma companies are balancing resilience, compliance and growth
Despite near-term uncertainties related to US tariffs and increased input/logistic cost led by geopolitical factors, a May 19 analysis from India Ratings and Research (Ind-Ra) forecasts that demand visibility for India-based contract development manufacturing organisations (CDMO)/contract research and development organisations (CRDMO) remains strong.
While revenue growth for the sector was impacted during FY26, led by destocking issues and molecule attrition, new order wins in late-stage pipelines improved growth visibility for the near to medium term. Ind-Ra predicts that high capex intensity will continue among CDMO/CRDMOs, with the balance sheet set to improve in FY26.
For FY27, Ind-Ra believes the credit metrics of Indian CDMO/CRDMO companies will remain comfortable, even though there may be some near-term margin pressure in 1HFY27 due to higher logistics and input costs amid geopolitical uncertainties, although operating leverage should provide partial offsets.
“We see FY27 as a year of operational harvesting, despite accelerated capex spend for the CDMO/CRDMO sector. This is in view of firm order visibility, building momentum in newer modalities including biologics, and the capacity added over the past two years that will translate into higher utilisation without compromising balance-sheet strength. CDMO/CRDMO are increasingly calling out investments into Artificial Intelligence (AI) to improve productivity especially on the discovery side,” says Nishith Sanghvi, Director, Ind-Ra.
In fact all experts who spoke to us for our cover story in the June 2026 Express Pharma edition, seem to treat geopolitical disruptions as the new normal. Finetuning supply chain resilience, manufacturing fluidity, etc was triggered during the COVD pandemic and continues to this day, displaying agility to adapt.
In fact, the irony is that these geopolitical flashpoints have revealed new opportunities. And while finance heads are closely monitoring spends and calling for sharper prioritisation of investments, risk mitigation and growth acceleration, they are also not shy to take bold bets on new therapy areas, to explore new geographies etc. The trick will be to find the right balance between resilience and expansion. Both larger pharma enterprises and smaller promoter-driven entities are playing for the long term, balancing near-term financial prudence while laying the foundation for measured, even aggressive, future bets.
India’s pharma supply chains are being forced to rethink resilience, adapt to disruption, and prepare for a far more unpredictable global environment, moving from cost optimisation to continuity planning. Supply chain resilience has become a competitive advantage, as will quality compliance.
To compound matters, pharma quality heads are dealing with increased regulatory scrutiny even as they are forced to balance rising compliance costs with operational efficiency.
Pharma manufacturing leaders have exchanged costbased, just-in-time schedules for just-in-case scenario planning. Companies are increasing inventories, rationalising that a shutdown due to lack of materials is more costly than inventory cost.
ESG compliance is an additional pressure on India’s pharma sectors, especially exporters. ICRA ESG Ratings’ latest report on the sustainability landscape of India’s pharmaceutical sector points out that with frameworks like the EU’s CSRD and the UK NHS’s net-zero procurement requirements raising the bar globally, Indian pharma exporters face growing pressure to decarbonise faster, improve supply chain transparency, and build more robust governance structures.
The good news is that approximately 83 per cent of pharma companies in India have adopted Zero Liquid Discharge (ZLD) systems, while the sector’s renewable energy share has increased to 25 per cent in FY2025 from 17 per cent in FY2023. API manufacturers carry the heaviest environmental burden, with high energy consumption, water use, and hazardous waste generation stemming from complex, multi-step chemical synthesis. Formulation players sit at the other end of the spectrum, with lower emission and waste intensity. Integrated companies strike the best balance, benefiting from scale, operational efficiency, and more mature ESG frameworks. Waste management remains a critical ESG concern, given the structurally high hazardous waste share (~67 per cent in APIs) and constraints on recycling, underscoring the need for stronger circularity and advanced treatment systems.
The not-so-good news is that while sustainability governance is gaining increasing traction, only around 35 per cent of companies have dedicated ESG committees, while 59 per cent have established formal emission reduction targets.
As ICRA ESG Ratings’ Chief Ratings Officer Sheetal Sharad points out, “API manufacturers continue to face structural challenges related to energy intensity and hazardous waste, and governance frameworks across the sector remain at an evolving stage. At the same time, global customers are increasingly positioning ESG as a core procurement criterion rather than a compliance exercise. In this context, continued focus on decarbonisation, improved Scope 3 visibility, and the strengthening of governance frameworks will be critical for Indian pharma companies to enhance competitiveness and sustain export growth over the long term.”
All in all, a perfect storm is brewing. India’s pharma leaders seem primed to ride it out, by adapting strategies in real time, investing for the future and making compliance a competitive advantage.