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Operational realities & global strategy realignment force MNCs to scale back their units in India: Dr Shenoy
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Nandita Vijayasimha, Bengaluru
April 17 , 2026
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Operational realities combined with global strategy realignment are increasingly forcing multinational pharmaceutical companies to shut down or scale back their units in India. Rising compliance costs, pricing pressures, and complex regulatory requirements are making local operations less viable, even as parent companies prioritize efficiency, portfolio consolidation, and higher-margin markets globally.
This growing disconnect between global priorities and on-ground challenges in India is prompting several MNC pharma firms to reassess their long-term presence and, in some cases, exit or restructure their operations, said Dr Premnath Shenoy, former director, regulatory affairs and patient safety, AstraZeneca, & Immediate Past President IPA- Karnataka State Branch.
Specifically in Karnataka, recently it is reported that MNC pharma major AstraZeneca Pharma India intends to sell its 64-acre manufacturing facility in Yelahanka in Bengaluru as the UK-based parent company reviews its global supply and manufacturing network. In 2021, GlaxoSmithKline Pharmaceuticals (GSK) sold its Vemgal, Karnataka manufacturing facility in Kolar district, Karnataka to Hetero Labs for Rs. 180 crore.
Over the past several years, multinational pharmaceutical companies have steadily wound down their manufacturing operations in India. In my opinion, this trend is not driven by a single factor but by a combination of global strategies and operational realities. We are seeing a strategic shift to capitalise India’s human resource capability with profusion of Global Capability Centres (GCCs) like AstraZeneca in Chennai and Novartis in Hyderabad among others, he added.
Mergers and consolidations are a key driver. When two large entities combine, they often inherit duplicate manufacturing facilities worldwide. To streamline operations and reduce costs, companies rationalize capacity, leading to closures in certain geographies, including India. Many MNCs adopt centralized manufacturing strategies. Innovative drugs are often produced at a single global site to ensure uniform quality and regulatory control. Regional hubs then handle country specific packaging, for instance, preparing packs for the Asian market in China. This reduces complexity but side-lines local manufacturing bases, Dr Shenoy told Pharmabiz.
Noting that managing multiple plants across diverse jurisdictions is inherently challenging, Dr Shenoy noted that regulatory requirements, pricing policies, and compliance burdens vary widely. For some companies, it is more efficient to import finished packs into India and focus resources on marketing and distribution rather than maintaining a full-scale manufacturing unit here in India.
These structural and strategic considerations explain the closures. The shift reflects a broader global trend as multinational firms increasingly prioritize efficiency, specialization, and centralized control, while leaving local markets to play a role in packaging, marketing, and sales, he said.
Often such vacated units are purchased by leading domestic Indian companies either to continue manufacturing as a running concern or, in some cases, for redevelopment by major real estate businesses. This secondary outcome reflects the value of these assets beyond their original pharmaceutical purpose, said Dr Shenoy.
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