Nutraceuticals Industry – Historical Perspective and Evolution in India
The nutraceuticals industry in India has undergone significant transformation, deeply influenced by its traditional medicinal heritage and the increasing global demand for health-focused products. Its evolution can be divided into several phases, each contributing to its emergence as a rapidly growing and promising sector. India’s nutraceutical foundation is rooted in ancient systems like Ayurveda, Siddha, and Unani, which emphasise preventive healthcare and holistic well-being. These traditional practices promote the use of natural herbs, spices, and dietary formulations to improve health and treat illnesses.
Ancient texts such as the Charaka Samhita and Sushruta Samhita document the therapeutic benefits of food, highlighting the importance of nutrition in maintaining good health. Ingredients like turmeric, ashwagandha, amla, and neem have long been staples in Indian households, valued for their culinary and medicinal properties. After India gained Independence, there was a gradual shift from traditional medicine to modern pharmaceuticals. However, during the 1980s and 1990s, interest in dietary supplements and functional foods was renewed, driven by growing awareness of the health benefits of natural ingredients. This period also saw multinational companies entering the Indian market, introducing Western dietary supplement models while integrating traditional Indian herbs and ingredients.
The early 2000s marked a pivotal era for the Indian nutraceutical industry. Globalisation fostered the exchange of knowledge and technologies, enabling Indian companies to innovate and manufacture high-quality nutraceutical products. Functional foods, fortified beverages, and dietary supplements targeting urban consumers gained popularity. At the same time, export opportunities flourished as Indian companies tapped into the global demand for herbal and natural products, particularly in the US, Europe and South East Asia.
Recognising the potential of the nutraceutical sector, the Indian government implemented supportive policies and regulatory measures. The establishment of the Food Safety and Standards Authority of India (FSSAI) in 2006 created a structured framework for the production, marketing, and sale of nutraceuticals. In recent years, the Indian nutraceutical industry has experienced exponential growth, fuelled by rising health consciousness, an aging population, and the increasing prevalence of lifestyle diseases such as diabetes, obesity, and cardiovascular disorders. The Covid-19 pandemic significantly heightened consumer demand for immunity-boosting products, leading to a surge in herbal supplements and functional foods. Technological advancements have also enabled the creation of personalised nutraceuticals tailored to individual health needs. Today, India’s nutraceutical industry represents a seamless blend of traditional knowledge and modern innovation.
Companies are leveraging advanced technologies like artificial intelligence and genomics to develop next-generation products, while Ayurveda nutraceuticals continue to gain global acclaim. With increasing investments in research and development, strong regulatory support, and a growing domestic and international consumer base, India is well-positioned to become a global leader in the nutraceutical space. This historical evolution highlights India’s unique role in combining its rich traditional heritage with scientific advancements, catering to both local and global markets in the pursuit of health and wellness.
Current Market Size and Trends in India
By 2025, the Indian nutraceutical market is projected to reach approximately $10 billion, with an impressive compound annual growth rate (CAGR) of 15-20% over the next five years. The industry’s growth can be attributed to several key factors. Lifestyle-related diseases such as diabetes, hypertension, and obesity are on the rise, spurring demand for health-focused products. Moreover, increasing awareness of the benefits of preventive healthcare, especially among millennials and Gen Z consumers, has significantly boosted the adoption of nutraceuticals.India’s extensive history of Ayurveda and herbal medicine plays a critical role in shaping its nutraceutical landscape.
The focus on immunity-enhancing products, particularly during and after the Covid-19 pandemic, has further accelerated the industry’s growth. Technological advancements are shaping the future of the nutraceutical industry in India. Companies are adopting cutting-edge technologies like artificial intelligence and machine learning to analyse consumer preferences and develop personalised health solutions. Research and development efforts are also focused on creating innovative products, including plant-based proteins, vegan supplements, and probiotics, to cater to niche markets and emerging dietary trends. The future of India’s nutraceutical industry is bright, with immense potential in both domestic and international markets. Sustaining this growth will require a continued focus on innovation, research, and regulatory support. By blending Ayurveda traditions with modern scientific advancements, India is solidifying its position as a global leader in the nutraceutical sector. The growing consumer awareness, technological progress, and favourable government policies collectively underscore the industry’s critical role in shaping India’s health and economic landscape.
Regulatory Framework and Policy Landscape
The FSSAI governs the production, marketing, labelling, and safety of nutraceutical products under the Food Safety and Standards (Health Supplements, Nutraceuticals, Food for Special Dietary Use, and Food for Special Medical Purpose, Functional Foods, and Novel Foods) Regulations, 2016. These regulations define permissible ingredients, labelling requirements, and health claims, ensuring product standardisation and consumer safety. To maintain quality, manufacturers must comply with Good Manufacturing Practices (GMP) and obtain necessary approvals for novel ingredients or formulations. The Ayurveda, Siddha, Unani (ASU) guidelines by the Ministry of AYUSH oversee products derived from traditional Indian medicine. India’s export policies for nutraceuticals are aligned with international standards set by agencies like Codex Alimentarius to facilitate global trade. Initiatives like Make in India and Production-Linked Incentive (PLI) schemes promote domestic manufacturing and innovation in the sector.
Additionally, the government encourages research and development through financial incentives and grants. With evolving consumer needs, the FSSAI continues to update regulations, ensuring the Indian nutraceutical industry aligns with global safety and quality benchmarks. This robust regulatory framework fosters growth while safeguarding public health.
Role of Ayurveda and Traditional Indian Medicine
Ayurveda and traditional Indian medicine play a pivotal role in shaping the Indian nutraceutical industry, providing it with a unique edge in the global market. These ancient systems emphasise holistic health and preventive care, which align seamlessly with the growing consumer demand for natural, plant-based, and immunity-boosting products. Key Ayurvedic ingredients such as turmeric, ashwagandha, giloy, amla, and neem have gained widespread recognition for their therapeutic properties. These ingredients are increasingly incorporated into dietary supplements, functional foods, and beverages. For instance, products targeting immunity, stress relief, and digestive health are leveraging Ayurvedic formulations to meet modern health concerns, including lifestyle-related disorders like diabetes and hypertension.
The Ministry of AYUSH has been instrumental in promoting Ayurveda-based nutraceuticals by supporting research, standardisation, and commercialisation of traditional medicines. Additionally, collaborations between Ayurveda practitioners and modern scientific researchers have enabled the development of evidence-based products, enhancing consumer trust. Globally, the demand for Ayurvedic nutraceuticals has surged, with Indian companies exporting these products to key markets like the U.S., Europe, and South East Asia. By blending ancient wisdom with modern technology, Ayurveda continues to serve as the backbone of India’s thriving nutraceutical sector.
Challenges and Strategies for Sustainable Growth – Indian Nutraceuticals
The Indian nutraceutical industry faces several challenges despite its rapid growth. Crucial obstacles include regulatory complexities, limited consumer awareness in rural areas, and fragmented supply chains. While FSSAI provides a regulatory framework, frequent updates and a lack of uniform enforcement create compliance hurdles for manufacturers.
Moreover, counterfeit and substandard products in the market undermine consumer trust. Insufficient investment in R&D also limits innovation, particularly in developing scientifically validated formulations. Dependence on imports for high-quality raw materials drives up production costs. The lack of awareness about nutraceutical benefits among rural populations further restricts market penetration, despite the country’s large consumer base. To achieve sustainable growth, companies must focus on enhancing R&D capabilities and leveraging technology to create innovative, evidence-based products. Strengthening quality control measures and adhering to global standards can build consumer confidence and improve export opportunities.
Expanding awareness campaigns, particularly in rural regions, can drive demand for nutraceuticals. The government can play a vital role by simplifying regulations, offering incentives for R&D, and promoting public-private partnerships. A collaborative approach between stakeholders will ensure the industry’s sustained growth and its contribution to national health and economic development.
(The author is assistant professor, Department of Pharmacology, School of Pharmacy and Technology Management (SPTM), SVKM’s Narsee Monjee Institute of Management Studies (NMIMS) Deemed-to-be-University, Shirpur)
