How the growing nutraceuticals market in India can contribute to the country’s GDP
Nutraceutical products come in the middle of diet and drugs and have gained immense popularity after the COVID-19 pandemic outbreak as preventive healthcare became top most priority for people across the world.
These products are derived from herbs, vitamins, minerals, and other dietary substances that boost immunity against diseases.
Considering the huge demand for these products, the Indian nutraceutical market has become mature after the pandemic to realise its potential and contribute to the country’s Gross Domestic Product (GDP).
Several reports and market insights suggest that the nutraceutical industry, which is slowly picking up in the country, can contribute significantly to realise India's target to become a $10 trillion economy by 2030.
However, it will require strengthening the overall ecosystem and make structural changes as ministerial levels to deliver these numbers.
Where does India stand in the global nutraceuticals market?
According to a report, the global nutraceutical market size was valued at $382.51 billion in 2019 and is expected to expand at a CAGR of 8.3 percent over 2020-2027. The Indian nutraceuticals market accounts for about two percent of the global nutraceuticals market.
This market is growing at a fast rate. The nutraceuticals market in India is expected to grow from $4 billion in 2017 to $18 billion in 2025. This comes in the backdrop of rising demand for dietary supplements from upper and middle class.
However, currently, the Indian market imports more than it exports. The Indian nutraceuticals industry has been growing annually at a good pace during the pandemic. The Foreign Direct Investment (FDI) has also increased.
Vitamins, minerals, health supplements, paediatrics, and proteins compose most of the global nutraceuticals market. Of these, the vitamin and minerals supplement space constitutes a good chunk of the total market.
Penetration of nutraceutical market in India
A significant increase in internet penetration has helped increase the visibility and availability of nutraceuticals in the market. While there is more penetration of nutraceuticals in urban areas, rural India is also getting close to this sector.
Dietary supplements also seem to have a potential weightage in market, besides nutraceuticals. The recent shift in consumerism has resulted in nutraceuticals occupying more than 50 percent of the market, which include both functional food and functional beverage.
Factors behind rise in demand for nutraceuticals in India
Indian population has now become more health conscious and the demand for nutrients and micro-nutrients like Vitamins (A, D & C), zinc, folate, and selenium has increased substantially. This growth has come from awareness that including essential nutrients and minerals in daily diet will boost immunity that is needed for protection against coronavirus.
Another factor propelling the demand for nutraceuticals in India is the fact that 15 percent of the population is undernourished in the country. As per a World Bank report on ‘Nutrition in India’, India loses nearly $12 billion in Gross Domestic Product (GDP) to malnourishment.
Pharmaceutical industry is among the top ten industries in India and nutraceutical sector has gained focus due to a renewed interest in immunity boosting products that will not subside for many years to come.
Besides, people are now going for nutraceutical products to avoid diseases or infections. So, they are adopting nutraceuticals in their daily diet to prevent the onset of pathological conditions.
Alternative or nonpharmacological approach to a health condition has emerged as a new phenomenon as people now want to avoid use of pharmaceuticals. Hypothetically, this makes more space for nutraceuticals in place of pharmaceuticals or drugs in the Indian market.
Challenges before Indian nutraceuticals market
Despite having over 100 large contract manufacturers in nutraceuticals, no one is able to tap into international projects. The way ahead would be some structural categorisation in ministries, startup incubation hubs, and regulatory framework.
This will help India emerge as a nutraceutical hub that delivers world-class nutraceutical products to meet the demands in the country as well as leave a positive impression in the international market.
In addition to this, regulation in taxation for nutraceuticals is also needed as the taxes levied on these products and other health supplements are 18 percent. This makes the products affordable to only a certain section of population. In some of the categories, taxes are as high as 28 percent.
Overall, if we analyse the current market scenario, India could be the next big source of raw materials as well as finished goods. The downfall of Chinese trade may also be a contributing factor and this in-turn can spike up India’s GDP.
Business and industry bodies in nutraceutical space have suggested that the Ministry of Food Processing Industries (MoFPI) can initiate the creation of subcategories and the biodiversity laws from the Ministry of Environment, Forest and Climate Change (MoEF) and National Biodiversity Authority (NBA).
This will help small to medium-sized players in India to avoid the US as the platform for the launch of their plant ingredients discoveries. It will also help them grow their business, which is currently affected by the complex biodiversity laws.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)