The document summarizes the rise of India's pharmaceutical industry in 3 stages: 1) Before 2005 when Indian companies sold low-cost generics, 2) 2005 when India signed a WTO agreement on intellectual property rights, and 3) After 2005 which saw dramatic growth. Reasons for growth included the WTO agreement, partnerships with Western firms, outsourcing to India for its low wages and educated workforce. International trade theories like Heckscher-Ohlin and Vernon's product life cycle help explain India's rise as an exporter by using its abundant low-cost labor and production moving from invention to developing countries. The drug industry benefits from India's cost-effectiveness while some Western partners may have lost activities during outsourcing.

1. “The rise of India’s Drug Industry”
Submitted by
-Libu V Babu
-Anusha Anil
-Kalamol S
-Shyno Sajan
(S3, MBA Stuents)
Macfast College,
Thiruvalla, India.

2. “The Rise o India’s drug Industry”
• What is Drug Inustry?
Drug Industry= Pharmacutical Industry
• Success story of Indian Pharmaceutical Industry.
Three stages in drug industry.
1.Before 2005 -Indian companies to sell low cost
generic pharmaceuticals.
2.2005 - India signed an agreement with
WTO(Intellectual Property Right)
3. After 2005 - Dramatic Growth.

3. Reasons for the Growth of Indian Drug
Industry?
• India signed an agreement with WTO in 2005.
• Partnership between Western and Indian firms.
• Outsourcing of manuacturing and packaging to
India.
• Relatively low wage.
• An educated work force.
• Widespread use of English as business language.
• The US Federal Drug Administration(FDA)
opened two offices in India to regulate standards.

4. Qstn.1?

5. 2. Who might have lost out as a result
of the recent rise of the Indian
pharmaceutical industry
• Partnership arose in the Us after India signed the
WTO agreement
• India cut back on activities when us started
outsourcing
• Increased number of plants in India
• Validity to India

6. 3. Do the benefits from trade with the
Indian pharmaceutical sector outweigh
the losses
• The pharmaceutical industry is one of the most portfolio
within the sector
• Industry has a rate of return on equity of 15.8% in US
• Attracts investors and companies looking to enter the sector
• The pharmaceutical industry requires high investments and
carries a high operation cost
• Freedom of exit is limited since it’s a specialized industry

7. • Increased number of companies and
employees
• More competitive
• India is the generator of drugs but not regarded
as the innovator(cheap labour and raw
materials)

8. Qstn. 4:-What International trade theory best
explain the rise of India as a major exporter of
pharmaceuticals?
• 1. The Heckscher-Ohlin Theory.
“ It states that a country will export goods that
use it’s abundant actors intensively and import
goods that use its scarce factors intensively”.
-India has low cost labour in abunance.
-US has scarcity in low cost labour.
-So the export incrases abunantly.

9. • 2. Product Life-Cycle By Ramond Vernon.
• “ this theory divides the marketing of a product into
four stages.
-Introduction.
-Growth
- Maturity
-Decline
The production moves from the point of invention(US)
to developing countries(INDIA).

10. Conclusion
• Dramatic growth of drug industry after 2005.
• Save cost through outsourcing.
• Cost effectiveness by utilizing india’s
unemployment scenario.

11. • Reference Source:-