Indian pharma firms cite a 'missing middle' that stalls China+1 export growth

Officials from Indian pharmaceutical and chemical companies attending CPHI Milan reported that the China+1 opportunity is real but constrained by a persistent "missing middle" in the industrial ecosystem. Mid-size firms struggle to secure financing, expand production capacity and meet complex regulatory standards that larger firms can more easily satisfy. Companies such as Deccan Nutraceuticals still rely on 20-30% of raw materials from China and lag behind Chinese rivals in process efficiency and cost.

Executives also pointed to limited R&D spending, inadequate infrastructure and the high expense of entering European markets due to additional registrations and audits. The consensus was that closing the scale, technology and regulatory gaps, rather than relying solely on low labor costs, is essential for India to benefit from the global shift away from China.