The global pharmaceutical market is projected to reach 1.6 trillion 2028 (CAGR:6.5 1.6 trillion by 2028(CAGR:6.52 million to $50 million+ depending on scale and location. In this guide, we break down every cost component, share regional cost comparisons, and provide actionable strategies to optimize your budget.
According to the Ministry of Commerce and Industry, the growth of the pharma sector jumped to 103% in comparison to 2013-14 and 2021-22, The absolute figure comes out to Rs. 90 415 Crores in 2013-14 to Rs. 1,83,422 Crores in 2021-22.
India has an edge in this sector due to a large skilled workforce available for the pharma industry. Countries like the US and the UK are big importers of Indian pharmaceutical generic products. If you are a business owner and looking to enter in pharmaceutical sector, the right way will be to start with a manufacturing plant. The Pharma marketing industry is struggling due to price fluctuations of third-party manufacturing companies.
Table of contents
Also Read: Pharmaceutical formulation plant for sale in North India
Roadmap to set up a pharma manufacturing unit:
- Land Acquisition
- Facility Design
- Regulatory Approvals
- Machinery Setup
- Workforce Hiring
- Commercial Production
Land & Infrastructure Costs: Location Matters
Land Prices INR (Per Sq.Ft)
| Region | Urban Area | Rural Area |
|---|---|---|
| Hyderabad, India | 6000 | 3500 |
| Uttarakhand, India | 4000 | 2500 |
| Haryana, India | 5000 | 3000 |
Infrastructure Essentials:
- Specialized Flooring: Epoxy resin (INR 80/sq ft) for contamination control.
- HVAC Systems: 1 cr.. to 1.5 cr. (critical for temperature-sensitive drugs).
- Zoning Laws: Environmental clearances add 6–12 months and 500000 (e.g., EU’s EIA Directive).
Factors Influencing Investment in setting up a pharma unit:
Several critical factors influence the investment required to establish a pharmaceutical manufacturing plant:
- Location: Proximity to raw material suppliers, transportation hubs, and regulatory bodies can significantly impact operational efficiency and costs.
- Land and Construction Costs: These vary based on the region and the scale of the facility. Urban areas may have higher land costs but better infrastructure.​
- Machinery and Equipment: The choice between semi-automatic and fully automatic machinery affects both initial investment and long-term operational costs.​
- Regulatory Compliance: Obtaining necessary licenses and certifications (e.g., GMP, WHO-GMP) incurs costs and requires adherence to stringent standards.​
- Utilities and Waste Management: Ensuring a reliable supply of water and electricity, along with efficient waste disposal systems, is crucial for uninterrupted operations.​
Investment Estimates
| Component | Estimated Cost Range (INR) |
| Land Acquisition (1000 sq. mt) | 50 – 70 lakhs |
| Construction (15000 sq. ft) | 1.5 – 2 crores |
| Machinery and Equipment | 1 – 1.5 crores |
| Utilities Setup | 50 – 70 lakhs |
| Quality Control Lab | 60 – 80 lakhs |
| Regulatory Approvals and Certifications | 10 – 15 lakhs |
| Initial Working Capital | 50 – 75 lakhs |
| Contingency Fund | 10 – 20 lakhs |
Regulatory Compliance for Pharma Unit Setup
Establishing a pharmaceutical manufacturing plant requires compliance with various regulatory standards to ensure product quality and safety:​
- Licenses and Registrations:
- Manufacturing License: Issued by the State Drug Control Department.
- GMP Certification: Ensures adherence to Good Manufacturing Practices and is issued by the State Drug Control Department.
- WHO-GMP Certification: Required for exporting products to certain countries and participating in government tenders.
- Approval Process:
- Application submission with a detailed project report.
- Inspection of the facility by regulatory authorities.
- Compliance with observations and recommendations.
- Issuance of licenses and certifications.
The entire process can take anywhere from 2 to 6 months for manufacturing license and GMP certification, further 12 months for WHO-GMP certification, depending on the preparedness and responsiveness of the applicant.
Timeline for Setup
The timeline for setting up a pharma unit may change for everyone because there are several factors that can affect the timeline, but a normal conditions timeline framework is provided below:
| Phase | Duration |
| Project Planning and Feasibility Study | 1 – 2 months |
| Land Acquisition and Legal Formalities | 2 – 3 months |
| Construction of Facility | 6 – 8 months |
| Installation of Machinery | 2 – 3 months |
| Recruitment and Training of Staff | 1 – 2 months |
| Regulatory Approvals and Certifications | 3 – 6 months |
| Trial Production and Quality Testing | 1 – 2 months |
| Commencement of Commercial Production | – |
Minimum steps to set up a pharma Plant?
Pharmaceutical formulation plant setup is a totally scientific and expertise-level job that requires a high level of precision.
The following major steps are required to set up a pharma plant:
- Designing and Planning.
- Layout map of plant All drawings like Building, fire, plumber, air, water and electricity AHU, Ducting, Doors, and pass box.
- Construction bounding.
- Clean room area development
- AHU and Fall ceiling
- Installation of machines.
- Setting up laboratory
- Preparation of documents like. SOPs, MFRs, Application for drug license.
Total time required to set up a pharma plant
Small-scale pharmaceutical manufacturing plants in India require a minimum of about 18 months to 24 months from the start to the production level stage. There are many things that consume time at the level of clearance by the government departments. If you need CLU or Form-143 in Uttarakhand or Form-118 in Himachal Pradesh, it may take up to 6 months.
The total time of completion of a pharma formulation plant may vary by various factors like DIC permission, Fire department NOC, Pollution department NOC, Form-143, Form-118, CLU, or bank-related hurdles. Therefore, it is always said that following the advice of an expert while building a pharma manufacturing plant, the advice of an expert will cut your cost in terms of avoiding the revisions of works, saving time, and resulting in an objections-free unit.
References:
- Business Today
- PIB.GOV.IN/Ministry of Commerce & Industry
- Phrma.org
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