NITI Aayog has proposed the inclusion of a dedicated pharmaceuticals chapter in future free trade agreements (FTAs), urging India to transition from a generic-drug manufacturing hub to a global capital for pharma innovation, according to the eighth edition of its Trade Watch Quarterly report. The report also reveals a separate inter-ministerial committee sanction—the acquisition of Indian Medicines Pharmaceutical Corporation by Skymap Pharmaceuticals for ₹121 crore, securing a 100% ownership stake.
Key Proposals in Trade Watch Quarterly
The Aayog backed greater regulatory transparency and stronger industry-academia technology transfer within life sciences clusters to accelerate patent commercialisation, research collaboration, and startup incubation. It also called for environmental compliance to be shifted from individual firms to shared infrastructure, noting that stricter environmental requirements have significantly increased manufacturing and R&D costs.
"biopharmaceuticals, India must complement its traditional manufacturing scale with deeptech innovation... to graduate from the pharmacy of the world to an undisputed capital for pharma innovation," the report said.
API Dependence on China
The report highlighted that India's pharmaceutical supply chain remains heavily dependent on China for critical active pharmaceutical ingredients (APIs) and key starting materials. According to the report, 65% of such imports are sourced from China. This reliance, combined with weak innovation and commercialisation ecosystems, has created uncertainty for innovators and long-term investment.
India's Global Generic Drug Market Share
India supplies affordable generic medicines to markets worldwide. The Trade Watch Quarterly cited the following shares:
| Region | Share of Generic Drug Requirements |
|---|---|
| Africa | 50% |
| United States | 40% |
| United Kingdom | 25% |
Related Development: IMCPC Acquisition
In a separate but related development, the inter-ministerial committee has officially sanctioned the acquisition of Indian Medicines Pharmaceutical Corporation (IMCPC) by Skymap Pharmaceuticals for ₹121 crore, securing a 100% ownership stake. The move aligns with the broader push to strengthen India's pharmaceutical sector through consolidation and investment.
Implications for Trade Professionals
The NITI Aayog proposals signal a strategic shift in India's trade policy, prioritising higher value-added pharma exports. Importers and exporters should monitor future FTA negotiations for a dedicated pharma chapter, which could include provisions on regulatory cooperation, IP protection, and technology transfer. The emphasis on reducing API dependence on China may lead to new sourcing patterns and investment opportunities. Customs brokers and trade analysts should track developments in India's life sciences clusters and the implementation of shared environmental compliance frameworks.
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