India is expanding its generic drug industry and supporting a sector-related exchange traded fund as the emerging market plays a greater role in the global health care sector.

“Indian generic drugmakers have moved upwards on the global value chain and managed to gain a foothold in regulated markets such as the US and Europe,” according to indxx.

Indian generic drugmakers now make up 40% of generics and 10% of finished dosages by volume. In the decade ended 2014, Indian generic drug sales surged to $17 billion from $4 billion, with an annualized growth rate of 16%, and foreign sales grew to $12 billion from $1.7 billion.

“Backed by the success of Indian companies in tapping the US generic drug market, a largely underpenetrated but fast-growing local healthcare market and strong fundamentals, Indian generic drug firms may be a compelling investment case for investors,” according to indxx.

Indian drugmakers make up the dominant share of abbreviated new drug application, or ANDA, drug approvals in the U.S. – applications for the approval of generic drugs. Indian companies are second to US-based companies in ANDA approvals and have accounted for 20$ to 25% of the first ANDA-approvals for a specific drug over the last few years, which may reflect their strong research and develop capabilities, according to indxx.

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