A silent revolution is unfolding in India's pharmaceutical manufacturing sector, with the potential to shape the future of global healthcare. According to a new analysis published by consulting firm LoEstro Advisors, India's Contract Development and Manufacturing Organisations' (CDMO) business is predicted to develop at a 14% annual rate, reaching USD 14 billion by the fiscal year 2027–28. 

A CDMO is a company that develops and manufactures medications for other pharmaceutical companies. These services range from research and testing to large-scale manufacturing. Instead of creating every medicine in-house, multinational drugmakers are increasingly turning to these partners – and India is quickly becoming the most trusted option. 

India possesses some distinct advantages that make it excellent for CDMO services. For starters, it is home to 585 US FDA-approved medicine production plants, the second highest in the world behind the United States. This means that India has already met the stringent safety and quality criteria established by American officials. 

Every year, more than 200,000 pharmacy graduates enter the Indian labour market, creating a significant pool of trained experts. This, combined with relatively low labour and land costs, makes India an affordable choice without sacrificing quality. 

"There is a clear opportunity for India to become the global CDMO hub," said Rakesh Gupta, Managing Partner of LoEstro Advisors. "We hope this report will guide pharma leaders looking to navigate the shifting landscape." 

A significant factor contributing to India's growing prominence is the shift in global policies, especially those from the United States. The proposed BIOSECURE Act seeks to limit federal contracts with American companies who collaborate with Chinese biotech corporations. Despite not yet becoming law, the proposed BIOSECURE Act enjoys bipartisan political support and is likely to pass. 

This issue is already forcing US-based drugmakers to seek alternatives to Chinese suppliers – and India, with its regulatory reputation and scale, is emerging as a strong contender. 

The global Contract Development and Manufacturing Organisation (CDMO) market is rapidly developing, with a strong focus on next-generation medicines. Among the most promising areas are cell and gene therapies, which aim to treat diseases by addressing their genetic causes; mRNA-based vaccines and drugs, which showed their potential during the COVID-19 pandemic; and antibody-drug conjugates (ADCs), which offer targeted cancer treatments with fewer side effects. These cutting-edge cures require more than simply manufacturing skills; they also necessitate advanced laboratories, extensive research ecosystems, and the incorporation of sophisticated digital tools. Recognising this trend, Indian CDMOs are making considerable efforts to expand their capabilities and position themselves as essential global participants in the high-growth precision medicine and biologics markets. 

Large Indian enterprises backed by private equity, such as Cohance, Viyash, and Sekhmet, are merging with smaller CDMOs to become stronger, more specialised organisations. This might help the sector scale faster, develop specialised knowledge, and fulfil global demand more efficiently. 

However, the surge of mergers and acquisitions presents hurdles for medium-sized businesses. They must now compete not only on cost but also on innovation, speed, and dependability. 

Traditionally, India's participation in global pharmaceuticals was viewed as a cost-effective choice. However, affordability is no longer the only consideration. Companies in Europe and North America are looking for long-term, dependable partners as economic and political uncertainty, increased expenses, and tougher environmental and social requirements become more prevalent. 

India's strong track record, qualified workforce, and infrastructural investments position it not just as a cost-effective but also strategic alternative for the future of medicine.