India's CRDMO to grow at 13% CAGR: Report

For years, India’s pharmaceutical prowess was defined by generics. Now, a new story is unfolding, a story that places India at the centre of the world’s most complex drug development pipelines.

A new Kotak Mutual Fund report signals a dramatic shift. India’s CRDMO sector is set to grow at 13% CAGR through FY24–FY29, nearly doubling from $8.2 billion in 2024 to $15.4 billion by 2029.

This isn’t incremental growth. This is India stepping into the global big league of Contract Research, Development & Manufacturing, the integrated engine behind biotech innovation and pharma discovery.

Globally, the CRDMO industry is expanding at a healthy 9% CAGR, fuelled by exploding biotech pipelines, rising drug complexity, and the rising cost of in-house development. And as pharma giants scramble to derisk supply chains, India has emerged as the obvious alternative to China—not as a backup, but as a competitive contender.

By 2029, India’s market share is projected to climb from 3.8% to 5%, capturing nearly $5 billion of outsourcing migrating out of China.

India’s Advantages Are Structural, Not Cyclical

Interestingly, India isn’t winning because China is losing. India is winning because its fundamentals are unmistakably strong. Here’s a set of compelling data points. First, India has the highest number of US-FDA–approved API facilities globally. Second, the country has significantly lower capex and operational costs. Third, it has world-leading process-chemistry expertise. Fourth, it has a regulatory track record trusted by global pharma. And lastly, there is a talent engine producing 29% of the world’s STEM graduates.

This is not a temporary arbitrage. It is a long-term competitive advantage.

Indian CRDMOs are no longer content being intermediate manufacturers.
They’re building end-to-end, research-to-commercial-scale capabilities, backed by aggressive industry capex. This shift positions India not as a follower, but as a full-stack partner in global drug discovery and development.

The China plus one tailwind is now a structural storm. Chinese CRDMO firms grew at an impressive 24% CAGR between 2019 and 2024. But geopolitical tensions, client concentration risks, and the need for supply-chain diversification have pushed pharma firms to look beyond China.

Result? India stands to gain the most not because the world is turning away from China but because India finally has the capability the world needs.

The future of drug development is more complex, more specialised, and more outsourced than ever. And India’s CRDMO sector is poised to become the backbone of that future: delivering cost efficiency, scale, regulatory trust, and scientific depth.