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3.2 Expansion of outsourcing business
As shown in the Figure 1. The exports of the Indian pharmaceutical increased greatly during the mid-1990s.The foreign pharmaceutical industries generate revenue of more than 1 billion dollars with the help of patents and increasing R&D costs. In turn, they spend a lot on R &D activities and patents and are unable to keep their bottom line. They have found an alternative to outsourcing some of their research and manufacturing activities in order to save costs in the process.
Initially, foreign companies hesitated to produce new drugs in India because of the Patent Act of 1970. But after the amendment of the Patent Act 1970, it was made possible for the unlicensed companies to manufacture patented products. The amendment also lowered the risk of outsourcing to Indian companies.
India has diverse culture from all borders whether it is from north to south or from east to west. It has distinct advantages as an outsourcing destination such as excellent development and manufacturing skills, low R&D costs, low manufacturing costs (manufacturing costs in India are 40-50 percent lower as compared to Western countries), a large number of trained chemists and biologists, abundant English-speaking skilled manpower, a large patient population providing a diverse pool for clinical trials for New Chemical Entities, and an extensively skilled IT industry.
The contract research and manufacturing services (CRAMS) business has been making quite remarkable name in India. CRAMS deals with manufacturing and research activities. Many Indian companies have entered CRAMS, which has led to a large number of CRAMS specialized companies. After the TRIPS Agreement, India has become one of the best choices for outsourcing destinations for foreign pharmaceutical companies and is becoming as one of the leading global manufacturing and R&D hub. It can be said that the TRIPS Agreement has made the Indian pharmaceutical industry more R&D oriented and R&D intensive, helping it achieve great heights in the global pharmaceutical market. 1

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