Speed in execution is essential for accelerating the growth of the Indian nutraceutical sector.

With rising consumer awareness and acceptance of preventive healthcare, the Indian nutraceutical industry has been expanding quickly at a CAGR of 21% over the past five years. The Ministry of Food Processing Industries projects that by 2025, the Indian nutraceutical industry would reach USD 18 billion.
Things are also changing on the ground. The demand for and awareness of nutraceutical goods are on the rise. The sector’s rise is proof that nutraceutical goods are widely used to improve eye health, immunity, and many other aspects of lifestyle, including sports. India lags much behind in terms of its contribution to the global nutraceutical business, despite having both resources and potential. The regulators and members of the sector are preparing in response to this demand. To address some of the difficulties facing the business, the government established a special task force team last year. Even if the development is currently gradual, there are several particular regions that might provide the industry a rapid boost.
PLI Scheme requires a comprehensive strategy. Manufacturing of nutraceutical is a difficult procedure that involves a lot of depending on the availability of raw materials. The majority of the raw resources needed across the world are supplied by the third-largest country, India. With all additional resources at our disposal, there is a significant opportunity to grow our base in more high-value product production in addition to only exporting herbs and medicinal plants. The PLI programme can be the trigger to accelerate this growth
The good news is that the Indian government is developing and conceptualizing a PLI plan for this industry. It may greatly enhance the agriculture industry as well, provided it is correctly designed with an integrated strategy for the nutraceutical sector. This is anticipated to give the industry a strong boost as it increases output and competes for the global market share.
Tax benefits must match those of peers.
Currently, the majority of pharmaceutical items fall within the 5% or 12% GST bracket. While nutraceutical items such as dietary supplements are subject to an 18% tax. This is further exacerbated by the fact that nutraceutical items lack their own distinct category and are occasionally even referred to as luxury goods. Progressive taxation is required, and it is past time to start giving nutraceutical items the same consideration—if not more—than pharmaceutical products, from the raw ingredients and APIs through the finished OTC products.
Why shouldn’t dietary supplements have the same status as pharmaceuticals given that they do function as preventative health care solutions, lowering the overall expense of healthcare in the nation?
HSN Codes and a dedicated desk under the appropriate ministry
It is crucial to streamline the product categories, standardize HSN codes for nutraceutical items, and align them to facilitate global trade. The current classification of all nutraceutical goods as “others” makes tracking and monitoring very challenging. We have a specific category for wheat flour, honey, and sugar.
The expansion and development of the sector will also be greatly aided by an interconnected and forward-looking environment. And to do that, we need a strong central authority. It will collaborate on resolving issues that arise within the ministry, suggest and develop the required policies for the industry, and serve as a catalyst to bring the key stakeholders together. It’s also important to think about establishing an export body for the sector. 90% of Indian API output is currently exported, generating large FX profits. Simply simplifying the HSN codes and supporting the sector through the PLI plan may increase export earnings by more than three to five times. Independent HSN codes can also be used to address some of the aforementioned issues.
The procedures must be streamlined, conservation and research must be balanced, and the overlapping provisions of the Biodiversity Act must be rapidly removed.
Together, these actions will encourage the necessary investment in the industry, which will eventually aid in scale growth. There will be incentives for manufacturers. This will increase the production of raw materials, improving farming prospects and helping farmers and the agricultural industry. Additionally, it will lighten the burden on imports, saving resources and generating FX income at the same time.
While there have been reforms aimed at streamlining, upgrading, and digitizing the whole value chain, drastic adjustments are needed to speed up the expansion. It is essential to have a well-planned roadmap from the farm to the formulation and its full implementation for this developing and incredibly exciting nutraceutical market. Although the special task force was established as the initial phase, it is crucial to go from planning to execution and implementation. A significant jump with no additional delay is a must for the industry’s evolution to increase in scope and size.

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