The Indian pharmaceutical industry is the third largest in the world by volume. It has grown at a fast pace over the past decade and is expected to continue growing at a CAGR of 14-17% through 2016. Key drivers of growth include the increasing prevalence of lifestyle diseases, patent expirations of large drugs, and the industry's focus on generics, contract manufacturing, and clinical trials. However, Indian companies still lag Western firms in R&D spending and new product approvals. The government is supportive through initiatives like funding for biotech parks, tax incentives for startups, and allowing 100% foreign investment in the sector.