Introduction
India’s pharmaceutical sector has long been known as the world’s pharmacy. The country ranks third globally in pharmaceutical production by volume and second in export value.
The Union Budget 2026-27 marks a significant new chapter. The announcement of Biopharma SHAKTI – a ₹10,000 crore initiative over five years – signals a deliberate shift: from generics to biologics, from volume to value.
This shift has implications beyond large pharmaceutical companies. Across the manufacturing and supply chain, SMEs and microcap businesses are positioned to play a meaningful supporting role in this expanding ecosystem.
Key Takeaways
- What is Biopharma SHAKTI: A ₹10,000 crore government scheme to build India’s biologics and biosimilars manufacturing ecosystem over five years.
- Pharma Sector Scale: India’s pharmaceutical market is valued at ~₹5 lakh crore in 2026 and projected to grow to ~₹6.6 lakh crore by 2031.
- SME Relevance: MSMEs form a critical part of India’s pharmaceutical ecosystem – from API manufacturing to packaging, cold-chain logistics, and clinical support services.
- Policy Infrastructure: 3 new NIPERs, 7 upgraded NIPERs, and 1,000+ accredited clinical trial sites are part of the Biopharma SHAKTI strategy.
- Investor Note: Always evaluate businesses on fundamentals – not just sector-level policy tailwinds.
What is Biopharma SHAKTI?
SHAKTI stands for Strategy for Healthcare Advancement through Knowledge, Technology, and Innovation. It was announced in the Union Budget 2026-27 with a five-year outlay of ₹10,000 crore.
The scheme targets domestic production of biologics – medicines derived from living organisms – and biosimilars, which are high-quality versions of complex biological drugs. These therapies address rising cases of cancer, diabetes, and autoimmune disorders.
The strategy includes 3 new National Institutes of Pharmaceutical Education and Research (NIPERs) and an upgrade of 7 existing ones. Over 1,000 accredited clinical trial sites are also planned across India.
India’s Pharma Sector – The Foundation
India’s pharmaceutical sector recorded a ₹4.72 lakh crore turnover in FY25, with pharma exports growing at 7% CAGR. The country is the third-largest medicines producer globally and second in export value.
The market is currently valued at approximately ₹5.55 lakh crore in 2026 and is projected to reach ~₹6.6 lakh crore by 2031, growing at a CAGR of 5.74%.
Biopharma SHAKTI builds on this base. The goal is not just to sustain growth, but to move India toward higher-value, innovation-led pharmaceutical segments.
Where SMEs and Microcaps Fit In
India’s pharmaceutical strength has been built significantly on its MSME base. Smaller businesses supply active pharmaceutical ingredients (APIs), intermediates, packaging materials, laboratory equipment, and analytical services.
The National Biopharma Mission already supports over 30 MSMEs and has generated over 1,000 specialized jobs – an early signal of how policy-linked pharma programmes create wider business opportunities.
With Biopharma SHAKTI directing capital toward biologics infrastructure, downstream demand for specialized inputs is expected to grow. Businesses in cold-chain logistics, cleanroom construction, lab consumables, and bio-fermentation equipment could see meaningful demand growth.
The Supply Chain Opportunity
Biologics manufacturing requires more complex infrastructure than traditional generics. Facilities need stricter environmental controls, specialized equipment, and high standards of quality management throughout the production process.
This creates meaningful business opportunities for smaller companies supplying and maintaining this infrastructure – from filtration systems and fermentation equipment to compliance software and precision packaging.
New NIPERs and clinical trial sites across India will generate regional demand as well. Businesses supporting laboratory services, clinical research operations, and medical equipment supply could see steady business growth as this network develops.
What Investors Should Consider
Biopharma SHAKTI represents a clear long-term policy direction. The biologics sector, however, is technically complex, highly regulated, and requires sustained capital investment before returns are realized.
Not every SME or microcap company in the pharma supply chain will benefit equally. Evaluation should center on business fundamentals including regulatory compliance track record, order visibility, customer concentration, and quality management.
Sector policy creates a supportive environment. It does not substitute for rigorous, independent business analysis.
Conclusion
India’s transition from generics to biologics is backed by institutional commitment. With ₹10,000 crore allocated under Biopharma SHAKTI, the government has signalled a long-term structural shift in its healthcare and manufacturing strategy.
For SMEs and microcap businesses contributing to India’s pharmaceutical supply chain, this policy environment offers a genuine structural tailwind. Identifying which businesses are positioned to benefit – on sound fundamentals – is where the real opportunity lies.
At Steptrade Capital, the focus remains on identifying businesses with strong operational foundations and long-term growth potential within India’s evolving industrial landscape.
