How AI is reshaping credit in India’s pharmacy trade

India’s pharmaceutical industry stands tall on the global stage, exporting to nearly 200 countries and playing an increasingly central role in global healthcare. It is now the second-largest CDMO player worldwide for small molecules, only behind China .

With Big Pharma re-evaluating its sourcing strategies and turning away from Chinese dependencies, India has emerged as the favoured destination for pharmaceutical innovation, production, and talent. Yet, even as India’s position strengthens globally, some critical issues at home continue to slip under the radar. One such concern lies in how healthcare retailers—those running the pharmacies in towns and cities across the country—navigate credit and trade finance.

In an industry where time and access can mean life or death, the use of outdated, informal credit systems remains a major bottleneck. The shift toward AI and data-backed credit assessment signals an opportunity not just for operational efficiency, but for building a healthier and fairer supply chain from the ground up.

The hidden cost of trust

Across the nation, particularly in smaller towns and rural districts, pharmacy trade runs on familiarity and faith. Distributors often offer medicines on credit based on long-standing personal ties or the belief that a store has a good reputation. This trust-based arrangement may feel intuitive, but it lacks transparency. When retailers delay payments or default, distributors are forced to restrict supply, impacting medicine availability for entire regions.

The ripple effect can be serious. Valuable inventory gets stuck, cash flow tightens, and even well-meaning retailers get lumped into a system where risk is shared, not measured. This model, once necessary in a less connected world, now acts as a drag on growth. It penalizes newer retailers with no credit history and fails to reward consistency. With limited visibility, both expansion and equity in access are compromised.

Credit decisions in real time

Today, the tools to replace guesswork with evidence are within reach. Retailers and distributors now leave digital footprints that, if interpreted wisely, can offer rich insights into how credit should be managed.

Artificial intelligence can stitch together patterns from transaction histories, payment behaviour, order frequency, and billing trends to provide a reliable picture of risk. Such systems do not rely on paper trails or long-standing familiarity; instead, they value financial conduct in the present. This approach doesn’t just protect distributors from exposure to bad debt—it empowers trustworthy retailers to access better terms, build creditworthiness, and tap into formal finance channels. This is especially critical in underserved geographies where credit exclusion has long been a barrier to consistent healthcare delivery.

Smarter systems for a smarter trade

Modern credit infrastructure is reshaping how pharmaceutical businesses operate at the grassroots level. AI tools offer real-time alerts when repayment patterns change, allowing course correction before financial strain sets in. Custom reports help stakeholders understand not just what is happening, but why, and what might happen next. When these insights are integrated directly into existing enterprise systems, decisions become quicker and more aligned with ground realities. Visual dashboards make complex financial data easy to digest, and expert support ensures issues are resolved swiftly. Underpinning all of this is secure technology that respects the sensitivity of health-related commerce.

Toward a more resilient future

The long-term outlook for India’s healthcare supply chain is bright. Estimates suggest the sector will cross $103.8 million by 2030, with pharma companies targeting double-digit revenue growth in the near term. Despite robust forecasts and export momentum, the impact will remain limited if domestic systems continue to lag. It is the everyday retailer—the pharmacy owner in a second-tier city or a district town—who ultimately connects India’s pharmaceutical strength to its citizens. If these retailers continue to operate in the shadows of informality, the benefits of innovation and efficiency at the top of the chain will fail to trickle down.

Introducing structure and intelligence into how credit is extended and evaluated is no longer a matter of competitive advantage. It’s a foundational move toward building a supply chain that is not just efficient, but equitable.

(Mannuri Vamshi Krishna is the Founder & CEO of MedScore, a fintech company)