In India raw drugs pertaining to some 7,500 medicinal plant species are claimed to be used in traditional medical systems. Many of these drugs are used in folk medicine in contrast to the more systematic and well-validated traditional medicine such as Ayurveda and Siddha which use much lesser number of carefully selected species. It is estimated that in India today more than 80% of the rural population resort to the use of herbal medicines.

The production of plant-derived pure drugs in modern India may be traced back to the establishment of the first phytochemical industry by the then British Raj at Mungpoo, Darjeeling. Quinine was manufactured from cinchona bark in three such state-owned factories. Six decades since independence, large-scale production of plant-derived pure drugs has become an important segment of Indian pharmaceutical industry. Morphine, codeine, papaverine, thebaine, emetine, quinine, quinidine, digoxin, caffeine, hyoscine, hysocyamine, xanthotoxin, psoralen, colchicine, rutin, berberine, vincristine, vinblastine, nicotine, strychnine, brucine, ergot alkaloids, senna glycosides, pyrethroids and podophyllotoxin are being manufactured in India today. Technology for the large-scale production of etoposide, teniposide, L-Dopa, ajmaline, ajmalicine and β-acetyl glycyrrhetic acid has been developed in our country. The Indian pharmaceutical industry is a major contributor to the national economy as 95% of the domestic demand for pharmaceuticals is met through indigenous production. Its export capability makes it a strategic trade sector in the Indian economy. India exports generic drugs to Commonwealth countries, Africa and even to the highly regulated US and European markets. It is one of the top 14 pharmaceutical manufacturing countries in the world with a market of US $2.5 billion. Imports are limited to a few life-saving drugs like anti-cancer, cardiovascular and anti-hypertension and other newer drugs not yet cleared for indigenous production. At present there are 12,000 manufacturing units of which 2,900 are large scale and the remaining small scale units. Of the large-scale units 45 belong to multinational companies. The Indian pharmaceutical industry thus represents a highly successful technology-based industry that has witnessed tremendous growth since the 1970s when our patent laws were changed. With the imposition of the TRIPS agreement, there have been concerns over its continued growth. Development of plant-derived pure drugs has been quite daunting in the face of other hurdles like dwindling supply of raw materials, lack of patent protection for indigenous traditional drug knowledge etc. However India has well lived up to the challenges and is responding to the change in patent laws. The Indian pharmaceutical industry is now moving towards the development of advanced level process and product R&D capabilities.