Indian Pharma Revenue to Grow 7-9% by FY26 Despite U.S. Market Challenges: ICRA

Quick Summary

• Domestic Performance: The Indian pharmaceutical sector is enjoying a robust domestic outlook,with expected revenue growth of 8-10% in FY2026. This growth is supported by sales force expansion, deeper rural penetration, and new product launches.Chronic therapies and price hikes continue to drive market share gains.
• US Market Outlook: After growing revenues by 9.9% in FY25, US market growth for Indian pharma companies is projected to slow down to 3-5% in FY2026 due to price erosion and declining sales of key products like lenalidomide.
• Global Challenges: Regulatory scrutiny by the USFDA could delay product launches and impose financial penalties on companies. Additionally, the imposition of 50% tariffs on Indian imports across multiple sectors (excluding pharmaceuticals for now) adds further uncertainty.
• Government Measures: Recent GST exemptions and rate reductions on select medicines aim to improve healthcare affordability in india.
• Projected Financials: Revenue for ICRA’s sample set of pharma companies is expected to expand by 7-9% overall in FY2026, with operating profit margins (OPMs) staying steady at 24-25%.

Indian Opinion Analysis

The analysis highlights two contrasting trends: strength in India’s domestic pharmaceutical market versus headwinds overseas-particularly the US, its largest export destination.Domestically,strategic investments like expanding rural distribution networks demonstrate adaptability towards addressing healthcare inclusion goals while maintaining profitability.

Globally, slowing demand from key drugs such as lenalidomide raises questions about long-term reliance on legacy products as revenue drivers.Regulatory scrutiny from the USFDA remains a persistent challenge that may weigh heavily on profit margins due to increased compliance costs.

Tariff hikes across other sectors indicate potential risks even if pharmaceuticals are currently exempted; any future inclusion could significantly affect exports given India’s position as one of the largest generic drug suppliers globally.Companies woudl benefit from diversifying export markets while continuing innovation-driven strategies at home-a dual focus necessary amidst global uncertainties coupled with promising local opportunities.

Read more: Published – September 18, 2025