India's chemical and pharmaceutical. ANI

The report added that this growth is supported by government incentives and lower operational costs, making India an attractive alternative to Europe, where several factors–such as higher energy and labor costs–are eroding its competitive advantage.

Multinational companies are shifting production to India, signaling a changing global landscape.

“Many multinational firms are shifting production to India, further eroding Europe’s market position. Higher costs of energy and feedstocks, costs of implementing regulations, labour costs and cost of capital are acting against Europe’s competitive resolve,” the report adds.

Talking about conditions in Europe, the report added that while Europe still holds a strong position in manufacturing high-value APIs and finished dosage forms, it faces challenges from outsourcing to countries like India and China.

As a result, Europe has lost ground in low-cost generic API production, according to the Nuvama report.

“Multiple steps involved in manufacturing complex APIs have been outsourced to China and India, due to which Europe has lost ground in API know-how. Europe remains a leader in high-value CDMO services such as biologics, oncology APIs and advanced drug formulations. However, low-cost generic API production is shifting to India and China, making Europe vulnerable to future supply chain disruptions,” the report added.

Moreover, the report says that Europe’s share in global chemical sales has sharply declined from 23 per cent in 2008 to 13 per cent in 2023, exacerbated by the closure of major chemical plants.

As per the report, these trends are contributing to the rise of India’s small-molecule pharmaceutical research industry and agrochemical exports, which are benefiting from favorable regulations. (ANI)