India Launches ₹10,000 Crore Biopharma SHAKTI Initiative to Drive Innovation

India has launched a major national mission to transform its pharmaceutical sector from generics manufacturing to innovation-led biologics leadership. In the Union Budget 2026–27, the Government of India announced Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation), a ₹10,000 crore national mission designed to transform India into a global manufacturing and innovation hub for high-value biologics and biosimilars.

The initiative represents India's decisive pivot from a generics-driven model to innovation-led biologics leadership. At a time when healthcare technologies are becoming increasingly complex and biologics are dominating the global pharmaceutical landscape, Biopharma SHAKTI represents a decisive shift from India's traditional strength in volume-driven generics to an innovation-led, technology-intensive biopharmaceutical ecosystem.

India's pharmaceutical industry has firmly established itself as a global leader in generic medicines and is widely known as the "Pharmacy of the World." The country supplies affordable medicines to more than 200 nations and accounts for nearly 20 percent of global generic medicine exports by volume. Indian pharmaceutical companies meet around 40 percent of the generic drug demand in the United States and contribute approximately 60 percent of global vaccine production by volume.

However, despite this impressive performance, the sector remains heavily skewed toward small-molecule generics. High-value biologics, such as monoclonal antibodies, recombinant proteins, advanced vaccines and gene therapies, are increasingly dominating global pharmaceutical revenues. Biologics account for nearly half of the global pharmaceutical market value and this share is projected to rise further as chronic and complex diseases increase worldwide.

India contributes around 3–4 percent of global pharmaceutical market value, despite commanding nearly 20 percent of global generic exports by volume. This gap between value share and volume share highlights India's structural challenge: while it excels in cost-efficient manufacturing of generics, it has limited penetration in high-value biologics and innovative therapies.

The global biopharma industry is witnessing a paradigm shift with artificial intelligence emerging as a key driver of change. AI is increasingly seen as indispensable for companies aiming to reduce costs and accelerate time-to-market. The most visible and significant impact of AI is being seen in early-stage drug discovery, where AI algorithms analyze vast chemical libraries to predict molecule behaviour and identify potential drug candidates with high precision, significantly reducing screening time.

Companies are also increasingly leveraging GenAI to design novel protein structures, effectively reducing the timeline from as long as 5 years to mere months. As of late 2023, AI-developed drugs showed an 80-90% success rate in phase I trials versus 40% for traditional methods. AI in the pharmaceutical market will reach $13.77 billion by 2030, driven by its increased use for cost-effective drug development.

AI is also transforming clinical trials, with patient recruitment being improved through AI platforms that analyze electronic health records and real-world data to identify eligible patient populations faster and more accurately. Such tools have been found to improve enrollment rates by 65%, accelerate trial timelines by 30-50% and reduce cost by 40%.

Indian pharmaceutical companies' entry into the drug discovery and development field dates back to the early 1990s when India announced the signing of the World Trade Organization agreement that introduced a product patent system from Jan. 1, 2005. Since the initiation of drug discovery by major companies in the 1990s, Indian pharmaceutical R&D efforts have resulted in over 200 preclinical and clinical stage development compounds, of which very few have reached the market.

While this illustrates that new chemical entity research has been taken up by Indian companies over last three decades, there still are issues like skill gap, insufficient understanding of tech transfer and IP protection, regulatory uncertainty regarding clinical trials, pricing uncertainties, and a lot remains to be done if we are to reposition India as a drug discovery powerhouse. The private sector has thus far allocated most of its investment to development rather than research.

Most importantly, certain diseases like malaria and tuberculosis are unique to India and other low and middle income countries. Since they do not draw the attention of global pharmaceutical companies, research for such diseases will have to be driven by Indian companies.