Challenges in Leadership Talent Retention: India's API Sector

India's Active Pharmaceutical Ingredient (API) industry is experiencing a high turnover rate in leadership talent due to a sharp increase in investments in the sector, according to a report by WalkWater Talent Advisors. The report states that talent churn in manufacturing leadership is currently around 40%, and this trend is expected to continue due to the demand-supply gap, with the API industry attracting robust investments. 

The leadership turnover is happening simultaneously as strategic consolidation in the API industry, driven by mergers and acquisitions (M&As) and private equity and venture capital (PE/VC) investments. This has led to the emergence of several large PE-owned companies. 

As manufacturing networks become more complex, top companies have increased their hiring of senior professionals in leadership and strategic roles to manage their expanding manufacturing operations. The survey covered 51 API companies and 120 candidates at the leadership level in manufacturing roles.

The pharmaceutical industry in India is expected to grow to $65 billion by 2024, with the API sector having a 35% share. Positioned as the world's third-largest API producer, India supplies 57% of APIs listed on the WHO prequalified catalog. This showcases India’s pivotal role in the global pharmaceutical market.

The report projects the Indian API market to grow at a Compound Annual Growth Rate (CAGR) of 13.7% in the coming years. With a robust domestic demand, advanced chemical industry, skilled workforce, stringent quality standards, and competitive operational costs (40% lower than in the West), India has become an attractive destination for investors.