India’s Contract Research, Development and Manufacturing Organization (CRDMO) market is projected to grow from $8.2 billion in 2024 to $15.4 billion by 2029, reflecting a strong 13% CAGR, according to the latest JPMorgan report. The analyst is also bullish on stocks linked to the CDMO sector. “We expect our covered companies to deliver superior growth and returns, forecasting 17% revenue CAGR and 20% earnings CAGR over FY25–28E,” JPMorgan said.
But what’s driving this growth? The study highlighted that the geopolitical shift from China+1, along with India’s regulatory policies and cost competitiveness, are key factors helping the country position itself as a “high-growth contender globally” in the CDMO sector.
Geopolitical realignment drives India’s CRDMO opportunity
The primary structural tailwind benefiting Indian CRDMOs is the ongoing geopolitical shift, with diversification strategies such as “China+1”, “EU+1” and rising “US–China tensions” directly boosting market share gains for Indian players. While China holds a 13% share of the global CRDMO market due to its scale, speed and cost efficiency, especially in complex drug modalities, India is emerging as the preferred partner, competing across all these dimensions. Early indicators of this structural shift are already visible in the sharp rise in RFPs (Requests for Proposal).
Cost advantage: 40–70% lower capex and operating costs
The report notes that India’s CRDMO ecosystem benefits from substantially lower capex requirements and operating costs compared to developed markets—typically 40–70% lower—as well as lower wage costs, as cited in the Sai Life Sciences DRHP referenced in the report. India also has the world’s highest number of US FDA–approved API plants, accounting for 31% of global facilities (278 plants) as of FY24.
Outsourcing momentum accelerates for Indian CRDMOs
Geopolitical shifts are also reshaping the outsourcing landscape. Indian CRDMOs, firms that help pharmaceutical and biotech companies develop and manufacture drugs, are accelerating in the global outsourcing race. The global CRDMO market, worth $213 billion in 2024, is expected to grow at 9% CAGR during 2024–29, driven by rising R&D spend, innovation, and increasing outsourcing by pharma companies.
India’s regulatory edge and investment push boost CDMO growth
Along with global factors India’s stronger regulatory compliance, better IP protection, lower labour cost inflation, and greater renewable energy adoption are also helping the country’s CDMO sectors gain share.
The Centre allows 100% FDI under the automatic route for greenfield pharma projects and up to 74% for brownfield projects. It has also launched initiatives such as the Production Linked Incentive (PLI) scheme for bulk drugs, with a total outlay of Rs 6,900 crore. Investments worth Rs 3,650 crore have been grounded under the scheme as of December 2023.
Indian CRDMO industry capex to hit Rs 67.2 billion by FY26
The report noted that Indian CRDMOs are now in the middle of a major investment cycle. Industry-wide capex—across companies like Divi’s, Cohance, Syngene, Anthem, Laurus Labs, Gland Pharma and others—is rising sharply, with aggregate investments expected to reach Rs 67.2 billion by FY26E. This marks a sharp acceleration from a 9% CAGR (FY21–23) to 22% CAGR (FY24–26E), signalling long-term demand visibility and growing enquiries from global innovators.
India’s CRDMO sector has delivered a healthy 13% CAGR over 2019–24 and is poised to sustain this momentum as global supply chains diversify and outsourcing deepens.
JPMorgan’s top India CRDMO picks
Divi’s Laboratories and Cohance Lifesciences is JPMorgan’s top pick among six companies that are best positioned to lead India’s ascent in the global outsourcing market including, Syngene, Laurus Labs, Anthem Biosciences and Blue Jet Healthcare.
JPMorgan highlighted that pharma company, Divi’s Laboratories has built strong scale organically, with deep expertise in process chemistry and reliable execution. Its upcoming investments and opportunities in contrast media and GLP-1 drugs support a strong growth outlook. If it gains market share in these areas, they could contribute more than 50% of current revenues by FY30.
Cohance, a tech-led CDMO, is expanding quickly in ADCs and oligonucleotides. Through acquisitions, it has grown its ADC market opportunity sevenfold to $1.8bn, with the segment expected to grow at 31% CAGR from 2024 to 2030. The company aims to reach $1bn in revenue by FY30 (26% CAGR), which in a best-case scenario implies a fair value of Rs1,600.
“We expect growth from niche technologies, a recovery in specialty chemicals, and strong CDMO performance to deliver a 22% earnings CAGR over FY25–28,” Jefferies noted.