Indian pharma diversified but US exposure remains key risk: JPMorgan’s Bansi Desai

Speaking at JPMorgan’s 10th Annual India Conference, Bansi Desai, VP – India Healthcare & Pharma Research at JPMorgan, outlined how Indian pharmaceutical companies generate their revenues and the risks they face.“About one-third of their revenues come from the domestic market, which is the India branded generic market,” Desai said, calling it a segment with stable growth. Another third of revenue comes from the US market, where tariffs and policy changes could have an impact. She noted that companies with higher US exposure are more vulnerable, but larger firms may be better placed because of their scale and local manufacturing presence.

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Desai added, “Indian companies account for almost 45 to 50% of US generic drugs prescribed in the US, so we are an important part of their supply chain.” She said it remains uncertain whether Indian generics will face tariffs.
On the contract development and manufacturing (CDMO) segment, Desai said these businesses are less directly affected by tariffs, as costs are usually borne by clients. “Even if tariffs were to be imposed, it can be absorbed by the innovators,” she explained.Desai pointed out that India’s share in the $200 billion global CDMO market is about 4%, though capabilities and capacity are growing. Indian companies are also benefiting from outsourcing trends and supply chain diversification strategies.

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Desai said CDMO firms are expanding capacity, with capex in 2024 expected at about 30% of their existing gross block. She also noted that companies are moving beyond small molecules into complex areas such as advanced drug conjugates, oligonucleotides, and peptides.

For the full interview, watch the accompanying video

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