Financial performance of the Indian drug and pharmaceutical industry, Imports and Exports

The financial quarterly performance of the Drugs and Pharmaceuticals Industry for quarter ended, March 2015 and the year 2015-16 (up to December 2015) is given below. The figures reported in the table show the percentage change in the respective items of income, expenditure, profitability etc as compared to the corresponding period the previous year.

As per CMIE estimates, Sales of the Drugs and Pharmaceuticals Industry registered a (y-o-y) growth of 12-14%, 14-69%, and 11.46% respectively, during the years 2012-13 to 2014-15. Net sales of the Drugs and Pharmaceuticals Industry grew by 14.91% (y-o-y) in the March 2015 quarter but declined to 9.24% (y-o-y) in the June 2015 quarter.

In the September 2015 quarter, net sales witnessed an upturn, at 17.01% (y-o-y), and at 16.74% (y-o-y) for the December 2015 quarter. The profitability of the industry improved during the said period. A healthy sales growth combined with an over three-fold rise in operating profits helped the industry to earn net profits equivalent to 13.1 % of income. In the December 2014 quarter, the industry had incurred a net loss equivalent to 8.4 % of income.

Most of the leading drug manufacturers posted higher sales during the quarter under review as compared to the corresponding year-ago quarter. This was aided by a healthy growth in the companies’ export revenues, especially from the US market. Lupin, Torrent Pharmaceuticals, Piramal Enterprises (PEL) and Glenmark Pharmaceuticals (GPL) led the pack by reporting impressive sales performance during the quarter.

The profit after Tax (PAT) net of prior period and extraordinary items, declined by (-) 27.35% (y-o-y)in the March 2015 quarter, by (-) 36.44% (y-o-y ) in the June 2015 quarter but increased thereafter to 61.55% (y-o-y) in the quarter ended September 2015, as compared to the corresponding period last year. At the operating level, margins of the industry scaled up by 1698 basis points to 22.1% on account of a sharp drop in operating expenses, against a healthy growth in net sales.

In the December 2014 quarter, Oxygen, Piramal Pharmaceutical Development Services, and PHL Capital got amalgamated into PEL. As a consequence of this, PEL had recognized a permanent diminution (of Rs. 24.2 billion) in the value of its investments in the intervening holding company of the companies that got amalgamated. This caused the industry’s operating expenses to mount during the said quarter. of such an expense in the December 2015 quarter, therefore, led the industry’s operating expenses to fall by 3.7 per cent. Resultantly, the operating profits of the industry grew by a staggering 243.4 % and operating margins expanded during the quarter. Operating were at 19.69% (y-o-y) for the March 2015 quarter, at 13.2% in 5.63% in the September and (-) 3.44% (y-o-y) in the December quarters respectively of the year 2015. PBDIT net of P&E&OI (Operating profit) registered a decline (-) 6.5% (y-o-y) in the March 2015 quarter. It was 4.17% in June 2015 quarter, 67.4% in September and 243.39% (y-o-y) in the December 2015 quarters as compared to corresponding periods of the previous year.

Drugs and Pharmaceuticals: Growth and Profitability in the Year 2015-16

(% change over year ago)

Sl. No
March 2015
June 2015
Sept 2015
Dec 2015
Total income
Net Sales
Total expenses
Operating expenses
Raw Materials, Stores & spares
Salaries & Wages
Power & Fuel
Interest expenses
Total Tax provision
Net Profit (PAT)
PAT net of P&E
Total expenses net of P&E
PBDIT net of P&E
PBDIT net of P&E&OI (Operating Profit)

Source: Centre for Monitoring Indian Economy (CMIE) Pvt Ltd data as on 19.03.2016.

As per CMIE estimates, investments in the drugs and pharmaceuticals industry is expected to remain buoyant during 2015-18 with companies in the industry altogether investing a little over Rs. 82 billion by March 2018.


(Rs. million)

Project completed
2015-16 (F)
2016-17 (F)
2017-18 (F)

Source: CMIE

The demand for Indian generics is expected to remain healthy. The drug manufacturers are also likely to tap new markets to give a thrust to export revenues. Therefore, drugs companies are likely to step up capacity to meet the rise in demand.

Warning letters and import alerts from US Food and Drugs Administration (FDA), the US drugs regulator, for India-based manufacturing units, have escalated considerably over the last couple of years following
the regulator’s increasing focus on compliance. Nevertheless, Indian companies are expected to upgrade their facilities to match up to the required standards.

Other than formulations and API, drug manufacturers are likely to make big investments in putting up facilities to manufacture vaccines and injections. Besides private players, State Government bodies eg. Kerala State Industrial Development Corporation (KSIDC) and Kerala Industrial Infrastructure Development Corporation (KIIDC) too are expected to invest in drugs & pharmaceuticals industry during the period under consideration.


  • The country is almost self-sufficient in case of formulations. The imports are being made on quality and economic considerations and not necessarily due to non-availability from domestic sources. Manufacturers of Drugs and Pharmaceuticals are free to produce any drug approved by the Drug Control authorities.
  • Imports of Drugs & Pharmaceuticals is done as per Foreign Trade Policy and the provisions of the Drugs & Cosmetics Act.There are certain incentives available to the exporters of Drugs & Pharmaceuticals which enables them Customs duty-free import of all inputs, required to manufacture the export products in line with Advance Authorizations granted by the DGFT. The quantities of inputs are as per published Standard Input-Output Norms (). In of the export product do not have published or the inputs are different from the published, ad-hoc norms are considered. Being the Administrative Department, the Department of Pharmaceuticals is actively engaged in processing Pharma Industry’s applications for fixation of ad-hoc norms. More than 650 such applications, both for Pharma formulations and Bulk drugs & drug intermediates, were processed by the Department during 2015.
  • In addition to conveying ad-hoc norms, the Department has also recommended publication of additional SIONs for a number of pharmaceuticals formulations and as many as 33 new SIONs are understood to have already been finalized for notification by the DGFT.
  • Import of some the drugs & drug intermediates is still restricted under current Foreign Trade Policy. Imports are restricted basically due to common HS codes for some narcotic substances or similarity to some Ozone Depleting Substances (ODS). Applications received from the Pharma industry, through the DGFT, for import of either the Bulk Drugs or intermediates whose import is restricted, are processed in the Department and suitable inputs are provided based upon the Actual User Status and essentially of usage of the chemicals to be imported.
  • Quite a few applications from the Pharma industry for import of certain dual-purpose chemicals, particularly Sodium cyanide included in the Schedule to the Insecticides Act, are also processed and suitable recommendations are conveyed to the Central Insecticides Board under the Ministry of Agriculture, in the capacity of Administrative Department, for grant of import permits to the Actual Users in Pharma Industry.

Import of medicinal and pharmaceuticals products for the last three years was as under:

Import of Bulk Drugs & Drug Intermediates*
Import of Drug Formulations & Biologicals*
Quantity in (Thousand kgs)
(Value in US $ Millions)
Quantity in (Thousand kgs)
(Value in US $ Millions)

Source: – Directorate General of Commercial Intelligence & Statistics, Kolkata.


Exports of medicinal and pharmaceuticals products for the last three years were as under: –

Year Exports of Medicines & Pharmaceuticals Products (Rupees in Crore) 
2012-13 79840
2013-14 90341
2014-15 94275

International Cooperation /Export Promotion Of Pharmaceuticals

Department of Pharmaceuticals has the following MoUs with foreign governments:-

  • MoU between Department of Pharmaceuticals Government of India and Department of Pharmaceutical Industry, Ministry of Health of the Republic of Belarus to strengthen cooperation in the spheres of manufacturing and trade of pharmaceutical products between the two countries and desirous of simplifying the process of registration of pharmaceutical products
  • MoU between Department of Pharmaceuticals Government of India and The State Administration of Ukraine on Medicinal Products on Mutual cooperation in Trade, Industry, Joint Venture (JV), Research & Development (R&D) in BioPharmaceuticals and Biopharmaceuticals sectors

Joint working Groups (JWG)/High Technology Cooperation Group (HTCG)

Department of Pharmaceuticals participated in the following International Cooperation events –

  • An Indian Pharma delegation, under the chairmanship of Shri Sudhansh Pant, Joint Secretary (Pharma) visited Suriname from 7-10 April 2015 for assisting in upgrading the pharmaceuticals production facility and pharmaceuticals waste disposal facilities in Suriname.
  • First Joint Commission Meeting between India and CARICOM was held on 2nd June 2015 in Georgetown, Guyana under the Co-Chairmanship of Shri R. Swaminathan, Special Secretary (AMS&CPV), MEA.
  • An Indian Pharma delegation, under the chairmanship of Dr. M. Ariz Ahammad, Joint Secretary, visited USA to participate in US-India BioPharma and Healthcare Summit at Boston (USA) on 11th June 2015; Drugs Information Association (DIA) Annual Meeting in Washington DC (USA) on 14-15 & 17th June 2015; and Bio 2015 Convention at Philadelphia (USA) on 16-17 June 2015.
  • 2nd JWG Meeting between India and Fiji on Cooperation in the field of health and medicine in Suva, Fiji under the chairmanship of Joint Secretary, Ministry of Health & Family Welfare.
  • 12th India-Kazakhstan Inter-Governmental Commission Meeting held on 16-17 June 2015 at New Delhi under the chairmanship of Secretary, Ministry of Petroleum & Natural Gas.
  • 3rd India-Philippines Joint Commission on Bilateral Cooperation (JCBC) held on 14th October 2015 at New Delhi under the co-chairmanship of External Affairs Minister.
  • 3EU-India Sub-Commission on Trade India-EU held on 15th October 2015 at New Delhi.
  • As an outcome of the 6th meeting of the EU-India Joint Working Group on Pharmaceuticals, Biotechnology and Medical Devices held on 30th April 2015 – 1st May 2015, a Video Conference was held with the European Union on 26th November 2015.
Department of Pharmaceutical has the following Joint Working Groups/High Technology Cooperation Group:-

  • EU-India Joint Working Group on Pharmaceuticals,Biotechnology, and Medical Devices – the last (6th) meeting of the JWG was held on 30th April 2015 – 1st May 2015 at New Delhi
  • India-Tunisia Joint Working Group on Drugs and Pharmaceuticals under the aegis of the Indo-Tunisian Joint Commission – the last (5th) meeting of the JWG was held on 5th November 2013 at New Delhi
  • India-Ukraine Joint Working Group on Pharmaceuticals and Healthcare under the aegis of the Indo-Ukrainian Intergovernmental Commission on Trade, Economic, Scientific, Technical, Industrial, and Cultural Cooperation – 1st meeting of the JWG was held on 15-16 April 2013 at New Delhi. 2nd meeting was held in Kyiv (Ukraine) on 21-22 January 2016
  • India-US High Technology Cooperation Group (HTCG) – the last meeting of G2G Working Group on Biotechnology and Life Sciences under HTCG was held on 21st November 2014 at New Delhi
  • India-Belarus Joint Working Group on Pharmaceuticals has recently been constituted
  • India-Philippines Technical Working Group (TWG) for considering “Pharmazone” and “Registration and other Issues related to Pharmaceuticals” has also recently been constituted.

The Department of Pharmaceuticals provided financial assistance for the following activities/events for promotion and development of Pharma sector from Pharmaceuticals Promotion Development Scheme (PPDS) during Financial Year – 2015-16:-

Sl. No
Financial assistances
1. Financial assistance to Green Chemistry to organize a Two-day industrial awareness seminar on Green Chemistry at Hyderabad on 27-28th April,
2. Financial assistance to SRM University for organizing Conference
3. Financial assistance to Drugs Controller, Drug Control Department of Kerala for organizing a Workshop on “Accessibility, Availability and
Affordability Medicines for All” on behalf of NPPA
4. Financial assistances to Indian Drug Manufacturers’ Association (IDMA) for conducting GMP Workshop for SMEs – Schedule M & Beyond at Chennai on 20th June 2015, Kolkata on 8th August 2015, Haridwar on 11th September 2015, Ahmedabad on 24th October 2015, Bengaluru on28th November Mumbai on 12th December 2015, Nasik on 21st December 2015.
5. Financial assistance to PHD Chamber for conducting Seminar on Pharma Export on 24th July 2015 at New Delhi
6. Financial assistance to Bulk Drug Manufacturer Association for conducting Technical Seminar to Celebrate “2015-Year of Active Pharmaceutical Ingredients” on 27th July 2015 at Hyderabad
7. Financial assistance to Indian Drug Manufacturers’ Association (IDMA) for organizing Seminar on Goods & Services Tax at Mumbai on 28 August 2015, Chennai on 28th September 2015
8. Financial assistance to ASSOCHAM for organizing Conference on Generic Medicines in India “Promulgating Growth & Access” on 3rd September 2015 at Chandigarh
9. Financial assistance to PHD Chamber for organizing Conference on Pharmacology (in Pharmaceutical Sciences): R&D for Minimizing ADRs and Role of Pharmacists in New Delhi in 23rd September 2015
10. Financial assistance to Durgapur Viswagandha Science Society for organizing a “Two-Day National Conference – Current Research in
Pharmaceutical Sciences-Challenges and Opportunities in India” on 3-4 October 2015 at Durgapur, West Bengal.
11. Financial assistance to ASSOCHAM for organizing a Conference on “IPR in Pharmaceuticals: Balancing Innovation & Access” on 7th October 2015 at Ahmedabad (Gujarat)
12. Financial assistance to NIPER, Hyderabad for conducting a National Conference on “Drug Discovery and Development: Global Scenario-Indian Perspective” 20-21 November 2015
13. Financial assistance to PHD Chamber for organizing a Conference on Pharma-Med 20154: 3As & Viability – A Glocal perspective in November 2015
14. Financial assistances to ASSOCHAM for organizing Conferences-cum-Awareness Programs on “Quality Management in Pharmaceutical
Manufacturing” GMP to drive future growth on 3rd December 2015 at Dehradun, on 28th January 2016 at Gangtok and on 16th March 2016 at Goa
15. Financial assistance to FABA in connection with Bio Asia 2016 from 8-10 February 2016 at Hyderabad