Unlocking Life Sciences Potential: How India Outshines Southeast Asia

India has long been a leader in the life sciences sector, setting the benchmark for pharmaceutical production, research, and clinical trials. Known for its expansive generic pharmaceutical market, India has become a global hub for contract manufacturing, research and development (R&D), and clinical trials. However, Southeast Asia is emerging as a formidable player in this space, with countries like Singapore, Malaysia, and Indonesia making significant strides in life sciences development. Southeast Asia has become a globally recognized place for conducting clinical trials. While India continues to dominate the life sciences sector, it’s important to explore both the advantages that India offers and the growing capabilities of Southeast Asian nations.

According to research, the Association of Southeast Asian Nations (ASEAN) pharmaceutical manufacturing industry is projected to grow at an annual rate of 12.8 per cent between 2021 and 2027 reaching $29.1 billion in 2027. Most ASEAN countries, rely heavily on pharmaceutical imports, particularly in the Active Pharmaceutical Ingredients (APIs) market. Singapore stands out as the only country capable of developing new drugs with essentially innovative APIs within the region.

In contrast, China and India have maintained a high level of independent API manufacturing and intermediate pharmaceutical technology products. The harmonization of Good Manufacturing Practice (GMP) criteria and the implementation of regular international inspections have played a crucial role in ensuring mutual quality assurances and promoting trade of medicines among ASEAN nations.

India’s Leading Position in Pharma & Biotech

India’s biopharma sector is one of the most robust in the world, driven by several key advantages. India is a global leader in generic pharmaceuticals, producing over 50% of the world’s vaccines and nearly 40% of the U.S. demand for generics. The country benefits from a cost-effective infrastructure, with low labour and material costs, making it attractive for multinational companies to set up manufacturing and R&D facilities. India’s vast talent pool, supported by top-tier educational institutions, provides a skilled workforce for clinical trials, research, and drug development. Government initiatives like the Production Linked Incentive (PLI) scheme, BioE3 Policy, and the National Biopharma Mission are fostering growth in life sciences, while India’s thriving R&D sector is driving innovation in biosimilars, gene therapies, and personalized medicine, alongside being a key player in global vaccine production.

India’s MedTech transformation: Paving the Path to Global Leadership

India’s MedTech industry is transforming from import reliance to a global hub, driven by innovation, digital integration, and government initiatives. India is the fourth largest medical devices market in Asia after Japan, China, and South Korea and among the top 20 global medical devices markets in the world. Companies like Trivitron Healthcare, Meril and Sahajanand Medical Technologies (SMT) have been pioneers in India’s medtech journey. Various government policies like National Medical Devices Policy, 2023, Promotion of Research and Innovation in Pharma MedTech sector (PRIP) scheme etc have further fuelled this growth.

Southeast Asia on the other hand, faces challenges in the medical devices sector due to its fragmented markets, smaller manufacturing scale, and reliance on imports for critical components. It lacks a unified policy support needed for significant global competitiveness. Higher operational costs in countries like Singapore and inconsistent regulatory frameworks across the region further limit its ability to match India’s dominance in medical devices.

Southeast Asia’s Growing Influence in Life Sciences

In recent years, Southeast Asia has seen a rapid transformation in its life sciences landscape. Countries like Singapore, Malaysia, Thailand, and Indonesia are investing heavily in biotech and pharmaceuticals. While India maintains its position as a leader, Southeast Asia’s rise presents new opportunities and challenges.

Singapore has emerged as one of the leading life sciences hubs in Southeast Asia, with a strong focus on biotechnology and pharmaceuticals. Singapore is among the top 10 life science clusters of Asia, a list that also includes Hyderabad and Bengaluru. The country’s well-established infrastructure, political stability, and business-friendly policies make it an attractive destination for multinational pharmaceutical companies. The Singapore Economic Development Board (EDB) has supported biotech innovation through funding and partnerships, making the country a leader in research and development, particularly in biologics and advanced therapeutic technologies.  The Singaporean government’s incentives for R&D investment, coupled with its competitive tax rates, have made the country an attractive investment destination. Multinational companies such as Novartis, Roche, and Merck have set up major operations in Singapore.

Malaysia is rapidly advancing in the life sciences sector, with a focus on biomanufacturing, driven by growing investments in R&D and manufacturing. With affordable labour and infrastructure as compared to Singapore, the country is developing pharmaceutical hubs supported by initiatives like the Bioeconomy Transformation Programme (BTP), which offers incentives to attract biotechnology and pharma investments. The government has also created a favourable environment for foreign direct investment through tax benefits and streamlined regulatory processes, while focusing on building a robust biotechnology ecosystem for innovations in regenerative medicine and medical devices.

Thailand offers an affordable cost structure, and the government is actively investing in building a biotech and pharmaceutical sector. The Thai FDA has streamlined drug approval processes, and the country is positioning itself as a leader in contract manufacturing. Thailand has established itself as the leading developer of vaccines in ASEAN due to its high calibre of researchers and vaccine developers. To promote research in biopharma, the government has established BIOTEC (National Center for Genetic Engineering and Biotechnology) and TCELS (Thailand Center of Excellence for Life Sciences), and multiple life sciences start-ups and incubators which drive innovation and development through research, infrastructure, and industry partnerships.

Indonesia, the largest economy in Southeast Asia, has a growing domestic pharmaceutical market. Tax holidays and allowances are given for foreign companies making significant capital investment plans, including firms in pioneer industries delivering value to the national economy. However, the country is still developing its regulatory and manufacturing capabilities, making it less competitive than India and Singapore in the short term.

Vietnam’s government has encouraged foreign investment in pharma through favourable policies which allow 100% foreign ownership in certain areas of the sector. Tax incentives for projects in high-tech and healthcare zones further enhance its appeal. Additionally, the government’s National Strategy for the Development of the Pharmaceutical Industry to 2030 focuses on localizing production, reducing import dependency, and promoting R&D collaborations by developing dedicated life sciences clusters. While Vietnam’s infrastructure is still maturing, its competitive labour costs and strong economic reforms make it a promising destination for pharma companies.

The Philippines’ pharmaceutical market benefits from its large population and increasing healthcare awareness, driving demand for medicines and health products. The government actively supports the industry through initiatives like the Universal Healthcare Act, which expands access to affordable medicines and healthcare services. Tax holidays, investment-related incentives, and exemptions for imported raw materials used in pharma production make the sector attractive for foreign investors and life sciences companies.

Advantages of India Over Southeast Asia

While Southeast Asia presents strong competition, India continues to have the edge in certain areas:

• Availability of Diverse, Skilled & Cost-Effective Talent: India enjoys a significant advantage over Southeast Asia in life sciences due to its large pool of highly skilled diverse and cost-effective talent, enabling companies to access a workforce that combines technical expertise with competitive labour costs. Vietnam is known for its textiles and electronics as main manufacturing sectors along with flourishing IT sector. Thailand is known for automobile manufacturing sector. Indian is known for its IT, services, research as well as manufacturing talent across the globe.

• Scale and Cost Advantage: India’s ability to produce medicines on a large scale at lower costs remains unmatched in Southeast Asia. The sheer size of India’s pharmaceutical manufacturing capabilities gives it an undeniable advantage in global markets. Countries like Singapore have high operational costs while Vietnam, Thailand and others lack proper connectivity outside of a few cities, leading to logistical setbacks.

• Presence of multiple life science clusters: India’s advantage over Southeast Asia lies in its multiple established life science clusters, which serve as hubs for pharmaceutical, biotechnology, and medical device innovation. These clusters are well-connected by robust road, rail, and air networks, ensuring seamless logistics and export capabilities. These clusters foster collaboration, accelerates innovation and enhances India’s ability to meet global demands more effectively than the fragmented ecosystems in Southeast Asia. Genome Valley in Hyderabad is one of the largest integrated clusters globally, offering a thriving ecosystem for R&D and manufacturing. Bengaluru Life Sciences cluster is also coming up well. Multiple life sciences clusters across India promote decentralization, reducing risks by diversifying manufacturing, innovation, and supply chain capabilities.

• India as a Global Capability Centre (GCC) Hub: India has emerged as a leading hub for Global Capability Centres (GCCs) due to its diverse and highly skilled talent pool, offering expertise across industries such as pharmaceuticals, biotechnology, IT, and engineering. India’s GCC market size is expected to touch $99-105 Bn By 2030. Unlike Southeast Asia, which often focuses on niche areas, India provides a broad spectrum of talent capable of driving innovation and operational efficiency. Its large English-speaking workforce includes professionals adept at R&D, data analytics, regulatory affairs, clinical trial management and digital transformation, enabling GCCs to handle complex, high-value functions seamlessly. GSK, Novo Nordisk, Astra Zeneca, Pfizer, Merck, Sanofi etc have their GCCs in India.

• India as a pioneer in life sciences: India has established itself as a pioneer in the life sciences sector, driven by the success of its pharmaceutical and biotechnology companies. Companies like Sun Pharma, Cipla and Reddy’s have set benchmarks in generic drug manufacturing and affordability, serving markets worldwide. In biotechnology, Biocon has emerged as a leader in biosimilars and biologics, making significant contributions to healthcare solutions for chronic and lifestyle diseases. India’s strong R&D ecosystem has also enabled companies like Serum Institute of India and Bharat Biotech to become global leaders in vaccine production, playing a pivotal role in addressing global health crises. Covaxin, developed by Bharat Biotech in India for COVID-19, has been exported to several countries across the globe including Southeast Asian along with Covishield, manufactured by Serum Institute of India. Southeast Asia, on the other hand is yet to see any such breakthrough in life sciences.

Conclusion: India vs. Southeast Asia – Who Will Lead?

India’s long-standing leadership in life sciences is expected to remain strong in the short term, driven by its unmatched scale, cost advantages, and robust R&D capabilities. The country’s large workforce, extensive manufacturing base, and government-driven reforms position it as the preferred destination for life sciences investments. As the sector evolves, the future of life sciences in Asia will likely see increased collaboration and interdependence, benefiting the entire region’s healthcare and pharmaceutical industries.