From Copycat To Creator

India Can Make Any Drug. What Will It Take to Invent a First-in-Class Molecule?

By Dev Chandrasekhar

What?

On March 20, 2026, Novo Nordisk’s Indian patent on semaglutide expired. Within 48 hours, more than sixteen generic versions of Ozempic had landed on Indian pharmacy shelves. Prices crashed 70 to 90%. Zydus launched three brands and anchored supply for Lupin and Torrent. Sun Pharma, Alkem and Natco piled in behind.

Dr Reddy’s launched Obeda with plans for 87 countries. Torrent went oral — the first Indian company to offer a generic tablet alongside an injectable, giving physicians the choice between needle and pill for the same molecule.

India had, in two days, demonstrated something it does better than any country on earth: copy any drug. For thirty years, the world’s most capable copying machine has been trying, fitfully, to do something harder — invent a novel drug for global markets.

For thirty years, copying was more profitable than inventing — faster, cheaper, almost guaranteed to succeed.

The semaglutide rush is that logic at its fiercest: sixteen generics in 48 hours, prices gone. Every patent that expires draws fifty brands, and margins collapse in this crowded business within weeks. The comfortable returns that funded three decades of growth are thinner, and getting thinner still.

A generics company, however large, earns nothing on molecules it did not discover. The originator’s premium — the royalties, the licensing income, the durable pricing power — flows elsewhere. A growing number of Indian pharma companies are now asking whether that has to be permanent.

The Scale Of What Exists

India supplies 40% of America’s generic medicines and two-thirds of the world’s vaccines. Its exports reached Rs 2.60 lakh crore in FY25; total industry turnover, including domestic sales, was Rs 4.72 lakh crore. The sector is not short of scale or ambition. The problem is direction.

India’s drug companies have built their R&D operations around improving and extending medicines that already exist. Yusuf Hamied, the Cipla chairman who made AIDS drugs affordable for millions, was candid about this in a 2015 interview with The Lancet, “Our R&D at Cipla is targeted at incremental innovation — how to change and improve a product that already exists.” The figure below shows what that looks like in numbers.

The Template That Failed

The odds against inventing are brutal. A new drug takes ten to fifteen years, costs $1–2 billion, and fails nine times out of ten. The person who understood this most clearly and chose to try anyway was Kallam Anji Reddy. He built India’s first drug discovery programme in 1993 alongside the generics business that was making him rich.

The generics side worked spectacularly: Dr. Reddy’s became the first Indian company to file for US drug approval, and in 2001 earned Rs 366 crore in FY2002 from its 180-day exclusivity on a generic fluoxetine 40mg capsule.

The original-drug side did not.

The current generation of Indian drug programmes is the most serious since Dr. Reddy’s was licensing molecules to Novo Nordisk in the 1990s. Of the three obesity candidates, Zydus is furthest along.

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2 trillion rupees

That’s how much the government collected in gross goods and services tax in March 2026, an 8.8% rise from a year earlier, according to government data released on April 1.

Context: The surge comes even after the government cut GST rates on a range of consumer goods in 2025 to boost demand. Those cuts, which lowered taxes on items like appliances, cars and personal care products, helped stimulate consumption and offset the hit from weaker exports.

Origin: That export weakness traces back to the so-called “Liberation Day” tariffs imposed by the US in 2025, which sharply raised duties on Indian goods and disrupted trade flows. In response, India leaned more heavily on domestic demand, with tax cuts aimed at keeping spending resilient.

Critical Moment: At the same time, geopolitical tensions have added pressure. The West Asia conflict has raised oil prices and freight costs, increasing input costs across sectors and reshaping trade patterns.

For now, strong GST collections point to a stable consumption base. But whether this momentum holds will depend on how global uncertainties evolve and how cost pressures filter through the economy.

Energy Costs Surge

India continues to battle its worst energy crisis in decades as the West Asia war chokes the Strait of Hormuz. Domestic retailers have hiked jet fuel by 8.6% and commercial LPG by 10.4%, reflecting a 44% surge in Middle Eastern benchmarks. To shield households, the government is diverting industrial gas supplies and keeping domestic cylinder prices unchanged, while securing 800,000 tons of LPG from the US and Russia.

Context: The regional conflict is escalating as the UAE reportedly lobbies for a UN mandate to open the Strait by force, Wall Street Journal reported. Simultaneously, Iran has reportedly targeted Qatari gas infrastructure, damaging a QatarEnergy tanker with cruise missiles.

Amidst this volatility, energy-starved Asian nations are pivoting to Russian crude, while India is considering its first Iranian oil import in seven years via the sanctioned tanker Ping Shun, Bloomberg reported.

Setup: On the diplomatic front, President Trump signaled a potential US withdrawal from the conflict within weeks, while renewing threats to exit NATO over lack of support, according to Reuters. Despite the looming supply crunch — expected to double in severity this month — Washington maintains that "Operation Epic Fury" has already neutralised Iran’s nuclear capabilities.

Oracle Job Cuts

Oracle has reportedly laid off thousands of employees in India on March 31, with some estimates placing the figure at around 12,000, although the exact number remains unconfirmed. Employees said they received early morning emails informing them their roles had been eliminated as part of a broader restructuring push.

Break: The cuts appear linked to rising automation and Oracle’s shift toward AI-driven operations aimed at improving efficiency and reducing costs.

Critical Moment: Meanwhile, Iran’s Islamic Revolutionary Guard Corps has accused US tech companies, including Nvidia and Apple, of enabling espionage, and has warned of possible retaliation against their offices in the Middle East. The companies have not responded publicly, and the allegations remain unverified, but they signal rising geopolitical tensions around technology and data security.

Car Industry Hits High

India’s passenger vehicle industry hit a new high in FY26, as industry estimates suggest domestic wholesales surged about 8% to nearly 47 lakh units. This record performance was fueled by the rollout of GST 2.0 and robust festive demand. While automakers like Maruti Suzuki, Mahindra, and Tata Motors posted all-time high volumes, Hyundai bucked the trend, reporting a rare annual decline.

Overview: Maruti Suzuki maintained its dominance, clocking record domestic sales of 18.23 lakh units, and continuing to hold a lion's share across segments. Meanwhile, the carmaker said it plans to hike car prices soon, citing rising input costs and geopolitical tensions.

Setting: The industry’s shift toward premiumisation and SUVs continues to redefine the leaderboard. Mahindra and Tata Motors capitalised on this trend to secure record growth. Shailesh Chandra, MD of Tata Motors PV, expects industry momentum to persist, fueled by SUVs, CNG, and EVs. However, he cautioned that geopolitical shifts must be closely monitored to mitigate potential supply-side risks.

Lending Growth Eases

According to a Crisil Ratings report, India’s credit cycle is set to remain stable but lose momentum in FY27, with bank credit growth expected to moderate to around 13%. The slowdown reflects normalising economic activity and a lag in private capital expenditure. At the same time, gross non-performing assets are expected to inch up, driven by rising stress in unsecured retail loans, microfinance and some MSME segments.

The Scoop: Crisil said corporate balance sheets remain resilient, providing a buffer against near-term shocks. However, it flagged the ongoing West Asia conflict as a key risk, warning that higher crude prices and supply disruptions could raise costs and pressure margins.

Future: “Our credit quality outlook is stable for now… but we remain cautious,” said Subodh Rai, Managing Director, citing uncertainty over the duration of the conflict. While most sectors should hold up, airlines, chemicals and ceramics may face greater strain.

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Indian Markets Gain on a Fresh Round of Optimism of War End

On Episode 837 of The Core Report, financial journalist Govindraj Ethiraj talks to Shivkumar Kalyanaraman, Chief Executive Officer (CEO)  Anusandhan National Research Foundation (ANRF) as well as Ajay Vij, Senior Country Managing Director at Accenture.

• Indian markets gain on a fresh round of optimism of war end.

• Jet fuel and commercial LPG prices rise as the Government tries to fend off pressure on domestic consumers

• The government said it would not apply its strict tax evasion rules on foreign investments made before ​April 2017.

• How India’s DARPA-like fund, the ANRF, is gaining momentum

• AI Business Use Cases are Moving from Experimentation to Execution