India’s INR 60,000 crore ($11 billion) drug market is growing 17%–20% annually, but domestic drug companies face new challenges to their businesses. The country’s National Pharmaceutical Pricing Policy has announced new price reductions for 276 drugs, which is expected to affect margins for both local and international drug makers. In addition, reductions in income taxes and excise duties in special manufacturing zones are scheduled to expire this year. Domestic drug firms are already dealing with the depreciation of the rupee against the US dollar, which has raised the cost of importing raw materials. According to Avendus Capital, although Indian generic firms have reported sales growth this year, several factors indicate that this is not sustainable, particularly for US sales.

Source: livemint.com