In Conversation With Sanjaya Mariwala

1. A lot of emphasis is given to nature-based medicines off lately across the world. What prospects do you see for India in the global market?

Enhanced awareness about healthy lifestyle, organic and nutrition-based food, the importance of functional food and dietary supplements, and in turn preventive care science – all these have culminated in the double-digit growth of the nutraceutical industry in the last few years and will continue to drive for atleast a decade more. As per CRN Survey, 77% of US adults take dietary supplements. A similar trend is slowly picking up in India too. Besides dietary supplements and functional food, herbal, and botanical supplements are also gaining popularity.

Based on the reported statistics, India currently represents only 1-2% of the global nutraceutical industry. The number itself speaks about the tremendous growth potential that is untapped in the sector.

Dividing the industry into 4 sub-segments i.e. (i) cultivation of botanical raw materials, (ii) raw material processing, (iii) ingredient manufacturing (APIs), and (iv) OTC products and formulations – India is largely present in only the first 2 segments. We have a limited presence in the 3rd segment and an almost negligible presence in the 4th segment. Currently, 90% of the API production from India is exported. By encouraging manufacturers to put more capacities, and extending some of the incentive plans, we can easily expand this segment with minimal effort and tap substantial export opportunities.

2. The Indian nutraceuticals market is estimated at $5.6 billion (Rs 42,000 crore) in FY21 and is growing at a CAGR of 10 percent but there are many roadblocks hampering the sector. What are the challenges that need to be addressed?

Taking care of human health is no longer the sole responsibility of an individual or one specific sector. It has and needs to assume top priority across the board – be it regulators, associations, business leaders, or individuals. When the stakeholders are many, it is essential to have a collaborative approach and work together to achieve a goal that is highly sensitive and humongous.

Nutraceutical products have proven their effectiveness, and acceptability has improved significantly. The numbers that you have already quoted demonstrate that. Despite these encouraging numbers, the potential we have tapped is just 1-2% of the global market. Some of the key initiatives that can expand our share in this pie are –

(i) Improve bio-resources and protect the endangered plant species through a structured planting process and other advanced mechanisms. It will increase raw material availability to manufacture and for clinical research.

(ii) Develop an internationally accepted code of conduct and quality standards for the natural botanicals. Develop a clinical study standard for nutraceuticals between industry, medical fraternity, and government. Build relationships with regulators and industry associations worldwide to develop new partnerships. All these will ensure that our products meet the global standards and acceptability in the international market is thus higher.

(iii) Invest heavily in popularizing the drives like “Make in India” to establish the high quality of products manufactured in India. Encourage manufacturing, extend PLI scheme to the sector, and develop agri-linked business models and integrated supply chain.

Some of these changes will help place India on the global map meaningfully.

3. What are your views on the growing importance of physical and mental wellness, especially post pandemic? Do you think healthcare dynamics have changed in the last two years? If yes, what trends are you observing?

Pandemic has been a “blessing in disguise” and gave a different thrust to how we are looking at overall wellness including physical and mental. People realised that once the damage is done, there is no reversal. Over dependence on modern medicine is slowly reducing now with increasing awareness, access to information, and various other means available to “stay healthy”.

Besides the pandemic, there is a significant shift in the lifestyle, which is increasingly becoming competitive and stressful. Trends and reports suggest that there is a significant rise in psychosomatic disorders resulting in health complications and chronic diseases. Mostly the severity multiplies by the time patients resort to and receive conventional medicine and treatment making cure prolonged or even impossible. Top this with the prohibitive cost of treatment and hospitalisation. This has also contributed to people resorting to systems of medicines that are focused on prevention (Ayurvedic, Homeopathic, Nutraceutical, and other such traditional streams).

Lastly, as the Indian workforce is slowly expanding the Gen Z pyramid base and observing the changing workplace trends, healthcare models are also transforming with these demographic changes. The biggest consumers of nutraceutical products today are Gen Z and Gen X. Gen Z is far more focused on their physical health and now slowly becoming more and more conscious of their mental wellness.

4. There is a thrust on manufacturing in India with various initiatives like Make in India, Atmanirbhar Bharat, and so on. How is this influencing the nutraceutical sector in India?

All these initiatives and drives are excellent. It is helping us to take the advantage of the gaps created especially after China started losing its standing in the global market. However, not all industries are able to take complete advantage due to some other regulations that are overriding the beneficial initiatives.

The nutraceutical industry is one of the best examples and hence we have not seen enough pure play nutra companies expanding their base, putting more capacities, and even considering forward/ backward/ vertical integrations. By nature, nutraceutical manufacturing is complex. To add to that, some of the regulations like the Biodiversity Act make it more procedural and bureaucratic. It has hence limited us to being the raw material supplier to the world instead of value-added products.

“Make in India drive” to work more effectively and reap sustainable tangible results, we need to have a focussed approach. We need to look beyond import reduction and also facilitate the sectors that have the potential to boost exports significantly.

5. Do you think extending the PLI scheme to the Nutraceutical sector will accelerate the growth of the sector?

PLI scheme is an excellent incentive to revive the manufacturing sector in India. It is an effort to not just become Atmanirbhar, but also to increase our share in global trade. Nutraceutical manufacturing is a complex process and is heavily dependent on raw material availability. Proximity to the farms is very critical for both research as well as manufacturing. The fear of technology, lack of willingness to involve themselves in agriculture and supply chains, disinclination to invest in marketing new concepts, and lack of standard guidelines/ policies for manufacturing and quality control are restricting the players to invest in this sector.

So far, the nutraceutical sector in India is generally overlooked due to its current size. However, to grow in size and scale we need more catalysts likes of PLI scheme to encourage manufacturers and stimulate the needed investment in this sector.