MAGNUM Blog

Indian pharmaceutical sector supplies over 50% of the global demand for various vaccines, 40% of the generic demand for US and 25% of all medicines for UK. India contributes the second largest share of pharmaceutical and biotech workforce in the world. Pharmaceutical sales grew more than ~9% y-o-y in 2020.

Indian drugs are exported to more than 200 countries in the world, with US being the key market. Generic drugs account for 20% of the global export in terms of volume, making the country the largest provider of generic medicines globally. It is expected to expand even further in the coming years. Pharmaceutical export from India, which include bulk drugs, intermediates, drug formulations, biologicals, Ayush & herbal products and surgical instruments.

With new Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates and Active Pharmaceutical Ingredients (APIs) In India and Scheme for Promotion of Bulk Drug Parks. Production Linked Incentive Scheme for Promoting Domestic Manufacturing of Medical Devices and Scheme for Promotion of Medical Device Parks. We envisage more FDI investment and new projects & expansion in capacities. The country’s pharmaceuticals exports are on course to cross US$ 23 billion for the first time this fiscal year after rising 14.85% yoy at US$ 11.78 billion in the first half. The growth is driven by drug formulations and biologicals, whose shipment grew a record 21.85% year-on-year to US$ 8.99 billion in the April-September period as countries around the world turned to India to meet a rise in demand in the midst of the Covid-19 pandemic that in many parts of the world triggered lockdowns and production disruptions.

Indian pharmaceutical industry’s export to the US will get a boost as branded drugs will become Off Patent by 2021-23. Companies are launching Generics version as getting approvals from USFDA. Recently India plans to set up a nearly Rs 1 lakh crore (US$ 1.3 billion) fund to provide boost to companies to manufacture pharmaceutical ingredients domestically by 2023.

Road Ahead

Medicine spending in India is projected to grow 9 12% over the next five years, leading India to become one of the top 10 countries in terms of medicine spending. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies.

BENEFICIARIES : VIVIMED LABS LIMITED, GRANULES INDIA, MARKSANS PHARMA, SOLARA ACTIVEPHARMA, DISHMAN CARBOGEN

The civil aviation industry in India has emerged as one of the fastest growing industries in the country. Growth due to COVID came to stand-still and Industry faced debt issue. India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024.

India’s passenger traffic is slowly picking up and currently passenger load factor is increasing. Low cost carrier SpiceJet announced the launch of its seaplane service between Ahmedabad (Sabarmati riverfront) and the Statue of Unity in Kevadia, Gujarat. The flights will be operated by SpiceJet’s fully-owned subsidiary, Spice Shuttle using a 15-seater Twin Otter 300 aircraft, the airline adding that it has secured 18 seaplane routes under UDAN. In an attempt to connect small cities of India with each other, the Government of India launched a Regional Connectivity Scheme, Udan (Ude Desh Ka Aam Nagrik). The scheme reached its fourth stage as the aviation ministry gave nod to 78 fresh routes under UDAN 4.0 to enhance connectivity to remote and regional areas of the country. In this stage, north east states, hilly areas and islands of India have been given priority. The fresh routes will encourage tourism & local travel in these areas and help strengthen their economies.

Freight is one more vertical of this industry, the freight traffic seems to be slow but gathering pace. The government has allowed 100% FDI under the automatic route in scheduled air transport service, regional air transport service and domestic scheduled passenger airline. However, FDI over 49% would require government approval. Government introduced Krishi Udan scheme on both domestic and international routes to help farmers in transporting agricultural products and improve the product value.

Road Ahead

Lot of Scope available in this sector as huge opportunity untapped, considering that air transport is still expensive for majority of the country’s population.

India would be well placed to achieve its vision of becoming the third-largest aviation market, would push growth automatically. The growth rate of more than 10% could be seen over next 2-3 years.

BENEFICIARIES : INDIGO, SPICEJET.