Medicinal plants are essentially consumed either as traditional medicines administered by traditional practitioners to the local population or as plant-derived commercial medicines dispensed as patented/licensed products on prescription or as over-the-counter (OTC) drugs. The latter mostly are products of allopathy with even products of traditional systems of medicine such as herbal nutritional supplements, cosmetics and essential oil formulations coming under this category. The economic value of both these categories of products depends on several factors:

• Multiple medicinal applications and usage in a number of formulations because of higher therapeutic effect as in the case of ‘elite species’ like neem and sandalwood.
• Single plant species of great market value on account of being the only known curative, for e.g., Catharanthus roseus yields vincristine that is specifically used to treat leukemia.
• Overexploited, high-in-demand medicinal plants like Rauwolfia that are difficult to cultivate and occur in localized areas in specific environmental conditions, on account of their low availability fetch high prices.
• High processing costs due to poor yield e.g. 1 tonne of vinca leaves are to be processed to isolate 1 g of vincristine.
• Structural complexity, novelty and powerful biological activity of plant-derived biomolecules that are either difficult to synthesize and/or are less efficacious.
• Urgent need for processed, consumer usable, value enhanced product rather than direct-harvested plant material.

In addition, costs of cultivation, transportation, packaging, further screening, processing, compound isolation, standardization, clinical testing etc. determine the overall cost of plant-based products.

The global trade in medicinal plants being secretive and unregulated, a large part of it is neither documented nor do trade statistics distinguish the therapeutic value of a plant from its other uses. However the current world market for herbal medicine including herbal products and raw materials has been estimated at US $62 billion with an annual growth rate of 5% to 15%, and it is expected to grow to US $5 trillion by the year 2050. The herbal food supplement market is estimated to have an even higher growth rate of 25%. A similar trend is envisaged for the herbal cosmetics market. The importance accredited to herbal drugs is reflected in the resent upsurge in the demand for herbal remedies in the international market. This is partly fuelled by the recognition of plant-based drugs in the policies of the United States and United Kingdom. These countries have set up national institutes and departments of complementary and alternative medicines that are investigating the scientific basis of the efficacy of traditional medicines. In the global herbal market European Union (EU) has the biggest share of 45% while North America accounts for 11%, Japan 16%, Asian countries 19% and rest of EU 4.1%. The rising demand for herbal drugs has put pressure on the ecosystems of the developing countries from where the bulk of the raw material is derived from the wild. This growing market demand is to be taken as an opportunity by these countries to explore the potential of medicinal plants for their sustainable socio-economic development.

The global market for medicinal plant-based raw drugs alone is estimated to be worth more than US $5 billion per annum. India’s export share in this is about 8% with China (24%) and the United States (11%) being the leaders. However India’s global market share becomes negligible (0.3%) if the annual global herbal market including medicines, cosmaceuticals and food supplements valued at US $62 billion is taken into consideration. Thus India’s contribution to the global herbal market however is a meager US $1 billion annually. Countries like Japan, China and South Korea have successfully marketed their traditional medicines abroad. Their alternative therapies are well accepted in Europe and the United States. Products like ginseng – the famed aphrodisiac similar in property to ashwagandha, an Ayurvedic medicine, – accounts for over US $800 million of international market as compared to all our herbs put together. Thus in the level of penetration of the global market, India does not figure anywhere near China or Japan.

The global herbal trade is estimated to be growing at an annual rate of about 7%. While the likelihood of a proportional increase in India’s share in the raw drug component is fairly high, a similar increase in its share in the finished product component is a highly doubtful. It is especially so in view of the stringent and unfavourable drug control legislations in the developed countries towards Indian Systems of Medicine (ISM) formulations.

India is unable to benefit from the escalating growth trend of the herbal drug trade due to the following constraints:

1. Need for evaluation of therapeutic potential of traditional drugs of age old usage as per WHO guidelines.
2. Ensuring availability of these drugs in standardized form as products of uniform quality.
3. Lack of information on the full potential of traditional drugs in the international community due in part to the lack of complete comprehension of Ayurvedic therapeutics in current scientific understanding.
4. Lack of awareness of the needs of the international market by traditional drug manufacturers along with dearth of technology to upgrade their produce to global needs.
5. Need for extensive documentation of traditional usage of medicinal herbs since centuries to protect them from exploitation and biopiracy as well as for patent protection.
6. Need for the development of sustainable cultivation methods and processing technologies to harness traditional medical knowledge for socio-economic development without threat to our biodiversity.
7. Ruling out adulteration, substitution, heavy metal and microbial contamination in every plant-based product that has been documented properly with regard to the identification of species and specific plant part utilized.
8. Lack of well-organized management of medicinal plant trade with adequate promotional strategies concurrent to orientation of indigenous population towards increasing global demand for medicinal plants to ensure employment and equitable profits to the grass-root level people.