Navigating geopolitical shifts: India’s strategic position in global pharma supply chains
Rakesh Gupta, Managing Partner, LoEstro Advisors, explains that speed, quality, and transparency will be the key differentiators as India’s CDMOs move from being seen as service providers to strategic partners
Global pharma supply chains are undergoing a fundamental shift in the backdrop of key US legislation that is set to pass soon. Since the late 90s, as drug discovery started to expand significantly in the US, the development model has evolved to increasingly rely on outsourcing. This evolution saw the development of China as a key partner – they capitalised well on the opportunity and developed a strong CDMO industry catering to US biopharma. However, growing concerns about data security and sensitivity, the US has introduced BIOSECURE to decouple US and Chinese biopharma supply chains.
With BIOSECURE set to pass soon, a large market opportunity has emerged – US biotech firms are actively looking for alternate partners to work with for outsourcing work at various stages in the drug discovery and development value chain. Here comes in India – India is strategically the best-positioned to capitalise on these tailwinds of a supply chain shift away from China.
There are a few key factors that have formed the crux of India’s growing relevance in the CDMO sector.
- Structural strength and scale
India offers a clear cost advantage —manufacturing costs are estimated to be up to 70 per cent lower compared to Western markets. But beyond cost, India’s strength lies in its infrastructure and scale. The country hosts over 585 FDA-approved facilities, second only to the United States, and more than 2,000 WHO-GMP-compliant plants.
This base of regulatory credibility has been built over decades, with consistently low OAI rates in USFDA inspections. There is a larger number of
- Talent and technical capabilities
India graduates more than 200,000 pharmacy professionals annually, supported by top-tier institutions such as the NIPERs and a network of 100+ pharma-focused research centres. This depth of talent enables Indian CDMOs to offer more than just capacity—they bring scientific capability to the table, a critical factor as drug development becomes increasingly complex.
As modalities such as mRNA, gene therapies, and antibody-drug conjugates become mainstream, the need for specialised talent and infrastructure is rising. Indian CDMOs are already investing in these areas—several have announced greenfield projects and acquisitions to build capabilities in biologics, oligonucleotides, high-potency APIs, and sterile injectables.
- Regulatory and government support
India’s government has moved decisively to support pharmaceutical manufacturing. The Production Linked Incentive (PLI) scheme has attracted investment from more than 50 companies. Meanwhile, the establishment of over 270 pharma SEZs and multiple biotech parks has streamlined logistics and enabled export-ready infrastructure.
Additionally, India’s IPR regime has aligned more closely with global standards. This makes it easier for Western biotech companies to collaborate with Indian partners without the baggage of historical mistrust.
- Private equity and strategic capital
India’s CDMO sector has seen significant interest from private equity investors, who recognise both the immediate upside and long-term potential. Firms like Cohance, Sekhmet, and Viyash have adopted platform strategies—acquiring and integrating multiple niche players to build scale, diversify capabilities, and improve margins.
This capital infusion is not just financial. It brings professionalisation, governance standards, and global relationships, helping mid-sized Indian CDMOs better serve complex global clients.
- Geopolitics and supply chain re-alignment
The introduction of the BIOSECURE Act is just one node in a broader geopolitical recalibration. The US and Europe are pushing for local or allied production of critical pharmaceutical inputs. India, as a democratic ally with proven manufacturing scale, stands out as a preferred partner.
Major US and European pharma firms are already restructuring their outsourcing portfolios. The initial phase involves moving early-stage development programs, traditionally handled in China, to alternate partners. India is increasingly being shortlisted, particularly for small molecule APIs and formulations. Over time, as trust and capacity grow, the scope of work is likely to expand into complex biologics and full lifecycle projects.
Challenges—and the way forward
Despite these advantages, challenges remain. Compliance with increasingly complex global regulations, especially around GMP and ESG norms, will be critical. CDMOs will also need to differentiate in a crowded market by investing in technology, flexible manufacturing, and customer-centric operating models.
There is a need to invest significantly in the Biologicals segment, with this segment poised to form more than 50 per cent of the total global pharma market by 2032, outsourcing needs will grow substantially, and India is currently lacking on both the infrastructure and the talent front.
Speed, quality, and transparency will be the key differentiators. India’s CDMOs must move from being seen as service providers to strategic partners. The ability to co-develop, innovate, and scale quickly will define who captures the next wave of biopharma outsourcing.