A paradigm shift is being witnessed globally towards preventative healthcare, with people becoming more health conscious and the rising prevalence of metabolic disorders. This transformation has led to increased consumption of nutritious food and intake of supplements to support a healthy lifestyle. The changing trend is expected to accelerate the global nutra market’s growth from $402.5 billion in 2022 to $1,354.2 billion in 2032, registering a CAGR of 12.9 per cent for the forecasted period (2022-2032) as per the Future Market Insights report.
Additionally, countries like India, with its rich history in ayurveda and herbs, have the potential to lead from the front and bring the industry into the mainstream sector instead of treating it as an alternative or supplemental medication. Though certain points stand unique, it is disappointing that despite the resources available, India contributes less than five per cent to the worldwide nutra market while economies like the US and China dominate the industry.
However, regulatory framework, high tax burdens and complex policies for commercialising nutra products are some of the major concern areas hindering the growth of the nutra segment despite increasing awareness. Moreover, the efficacy and safety issues that arise without regulation and lack of monitoring by government agencies result in scepticism about nutra products. Another area for improvement for the nutra industry growth is its formulation or synthetic sourcing, as the majority of consumers do not favour products that have been genetically modified.
Given these challenges, the players in the nutra sector have developed various measures to set the industry on a high growth path. For example, modern technologies such as artificial intelligence (AI), robotic process automation (RPA), edge computing and Internet of Things (IoT), gene editing, microfluidics and 3-D printing are turning out to be key growth drivers for the sector.
Today, many nutra companies use AI for quick ingredient selection, recommending the most personalised nutrient formulations and estimating demand. Further, using RPA has enabled nutraceutical manufacturers to boost productivity, lower costs, improve performance and accelerate product marketing.
While nutraceutical players are making great strides in adopting modern technology to fuel business growth, government policies are also gearing towards creating a conducive environment for the sector. Recognising this, the government has set up a task force in 2021 to transform India into a $100 billion nutra market by 2030.
Further, with its resource-rich base, India has vast scope to expand its share in more value-added nutra product manufacturing. There is an urgent need for the formulation of Product Linked Incentive (PLI) scheme with an integrated approach for the nutraceutical sector, which will significantly boost agriculture and the value chain of nutra products.
The measures like bringing competitive taxation policy for nutra by giving them the same status as pharma, rationalisation of GST in the range of 5-10 per cent on nutra products against the current rate of 18 per cent, and support to R&D in nutra through the PPP model are warranted to foster the growth of the nutra industry.
Moreover, the policy support for establishing R&D parks dedicated to nutra will facilitate robust research and development and an innovation ecosystem in the nutra space. The government should also consider including nutra under the National Medicinal Plants Board scheme to encourage backward vertical integration. The amendment to Biodiversity Act is also essential to promote backward integration in nutra companies.
The rapid growth of the Indian nutra industry in the coming years further corroborates tremendous opportunities for nutra entrepreneurs. Preventive healthcare is here to stay; undoubtedly, the Indian nutra industry will continue witnessing phenomenal growth and evolve as a global hub.