India’s CDMOs, CRDMOs to benefit from global biopharma’s increased outsourcing: report
Indian contract development and manufacturing organizations (CDMOs) and contract research, development and manufacturing organizations (CRDMOs) are poised for sustained growth through fiscal 2026, amid supply chain realignment initiatives by global biopharma companies, according to a new report from India Ratings and Research (Ind-Ra).
India’s CDMOs and CRDMOs are well positioned to capitalize on rising demand for their services, as the biopharma industry shifts its supply chains and outsourcing away from China to Indian service providers, the report finds.
“The China+1 strategy adopted by global pharmaceutical and biotech companies is accelerating the shift away from China-centric sourcing,” Ind-Ra states. “India is emerging as a preferred alternative, thanks to its strong regulatory compliance, cost-effective operations, and scalable infrastructure.”
The reorientation of supply chains is resulting in faster ramp-up of capacity utilization with Indian CDMOs and CRDMOs benefiting from increased outsourcing initiatives by global biopharma companies, according to the report.
“Given the scale differential between Indian and Chinese CDMO players, even a small shift in procurement strategies may lead to significant benefits,” the report states.
Ind-Ra notes that outsourced R&D and manufacturing provides significant cost efficiency, driven by specialized expertise, economies of scale, and access to skilled talent pool, enabling faster drug development and market entry through advanced technologies, as well as optimized processes and regulatory compliance.
“CDMO/CRDMO companies will continue to benefit from long-term client contracts and investments into newer modalities (peptides, antibody drug conjugates, and oligonucleotides) and processes (flow chemistry, green chemistry, and biocatalysis),” Nishith Sanghvi, director of corporate ratings at Ind-Ra, said in a statement.
Large pharma companies are increasingly focused on late-phase and commercial-stage programs and looking for outsourcing partners who can deliver cost-efficient services, according to the report, which concludes that Indian CDMOs and CRDMOs with integrated capabilities and end-to-end service offerings are well positioned to seize the opportunities.
“Supply chain rebalancing initiatives have benefited players in the CDMO space at a broader market level, while destocking/molecule attrition has impacted a few CDMO players depending on product concentration,” Sanghvi said. “The CRDMO sector has witnessed a higher proportion of business emanating from large pharma companies, but significant share of the business will be driven by biotech companies.”
A February 2025 report from the Boston Consulting Group (BCG) and the Innovative Pharmaceutical Services Organization (IPSO), a new consortium of 11 India-based CRDMOs, found that the sector stands to benefit from this outsourcing trend and recent geopolitical dynamics, with the potential to grow from an industry currently valued at $3 billion to $3.5 billion — an approximate 2% to 3% share of the $140 billion to $145 billion global CRDMO market — to between $22 billion to $25 billion by 2035.
However, in the BCG-IPSO report, Aragen CEO Manni Kantipudi wrote that while India’s CRDMOs are in a position of strength, realizing their potential “requires more than just opportunity — it demands bold action” such as building a “self-reliant” supplier ecosystem and accelerating access to capital to invest “aggressively” in talent and technology.
“The goal is clear: to move from being a preferred outsourcing destination to becoming a co-innovator on the world stage,” Kantipudi said. “The momentum is here. The time to seize it is now.”
