The Indian health and wellness landscape has undergone a significant evolution in recent years. Amid growing consumer awareness about preventive healthcare, shifting lifestyles, and rising incomes, nutraceuticals—products derived from food sources with added health benefits beyond basic nutrition—have gained unprecedented traction. From vitamins and minerals to herbal extracts, functional foods and dietary supplements, this segment bridges the gap between nutrition and medicine, positioning itself at the convergence of three major industries: food, pharmaceuticals and wellness.
India’s unique combination of favourable factors—including a vast biodiversity, strong herbal tradition, a large young and middle-aged population, and a growing base of health-conscious consumers—makes it ideally suited to capitalise on the global nutraceutical wave. According to industry estimates, the Indian nutraceuticals market reached around USD 8.78 billion in 2024 and is projected to grow significantly in the coming years.
Meanwhile, the contract manufacturing segment for nutraceuticals—third-party manufacturing—has emerged as a strategic enabler for brands, start-ups and private label players to scale quickly without heavy capital expenditure.
Third-party manufacturing allows brands to outsource formulation, production, packaging and regulatory support to specialist manufacturers who offer turnkey services. This model is particularly attractive in India, where a rich manufacturing ecosystem, cost advantages, regulatory support and export potential combine to create robust opportunities. As the demand for nutraceutical products rises—driven by aging populations, lifestyle disorders like diabetes and cardiovascular disease, and increasing wellness aspirations—the role of contract manufacturers becomes ever more critical.
In this article, we explore the rising demand for nutraceutical third-party manufacturing in India—why it’s growing, what drives it, what the key considerations are when selecting a manufacturer, and how businesses can leverage this growth to their advantage. By the end of this guide, you will have a clear understanding of how the Indian nutraceutical manufacturing landscape is evolving, and how third-party manufacturing can serve as a meaningful growth strategy for your business or brand.
Why the Demand Is Rising & What’s Fueling Third-Party Manufacturing
The Surge in Nutraceutical Demand in India
The demand for nutraceutical products in India is being propelled by several converging trends. Rapid urbanisation, changing dietary habits, increasing disposable incomes and heightened health awareness are driving consumers to look beyond conventional medications and access preventive, functional and wellness-oriented products. For instance, the Indian nutraceutical market is estimated to reach USD 23.51 billion by 2032, growing at a CAGR of around 13% from 2025–2032.
Additionally, the prevalence of lifestyle diseases—such as diabetes, hypertension and obesity—is accelerating demand for supplements, functional food and beverages that offer benefit beyond basic nutrition.
The COVID-19 pandemic notably intensified this shift, as consumers prioritised immunity, gut health, and holistic wellness, further expanding the nutraceutical ecosystem.
In parallel, distribution channels have evolved: e-commerce, direct-to-consumer (D2C) models and digital marketing have made nutraceutical products more accessible, even in tier 2 and tier 3 cities.
Moreover, the Indian government has played a facilitating role—with policy reforms, regulatory clarity through the Food Safety and Standards Authority of India (FSSAI), incentives for manufacturing, and export-promoting schemes—which has made the landscape more favourable for manufacturing and export of nutraceuticals.
Why Third-Party Manufacturing (TPM) Is Gaining Momentum
Given this rising demand, the need to scale manufacturing quickly and cost-effectively has spotlighted the third-party manufacturing model. Brands, especially start-ups, D2C players and private label entrants, often lack the infrastructure, expertise or capital required to set up full manufacturing operations. Contract manufacturing or TPM allows these players to outsource production to established facilities, thereby focusing on marketing, branding and distribution.
Some of the key drivers for TPM are:
- Lower capital investment: Instead of building their own manufacturing unit, brands leverage existing capacity and expertise of specialist manufacturers.
- Faster time-to-market: Manufacturers already with GMP/WHO-GMP facilities, experience in formulation and packaging can accelerate product development and launch.
- Regulatory and compliance support: Established manufacturers typically have in-house quality control, documentation systems, and compliance with FSSAI, WHO-GMP and export norms.
- Flexibility for scale: Brands can scale with demand without the risk of under-utilised capacity; manufacturers cater to multiple clients, optimising utilisation.
- Expertise in packaging, speciality formats and private labeling: In a market where formats such as gummies, effervescent tablets, herbal blends, functional beverages are emerging, manufacturers with multiple capabilities provide advantage.
Thus, third-party manufacturing in nutraceuticals emerges as a strategic growth lever—allowing brand owners to concentrate on product innovation and market growth, while manufacturing specialists handle the complexities of production, compliance and supply chain.
Key Considerations for Nutraceutical Third-Party Manufacturing in India
When entering the nutraceutical third-party manufacturing route in India, brands must evaluate multiple factors to ensure quality, compliance and sustainable growth. Below are eight key considerations—with a short explanation for each.
- Certifications & Regulatory Compliance- Ensure the manufacturer operates under stringent protocols—GMP, ISO standards, FSSAI norms and preferably WHO-GMP if exporting. This demonstrates their readiness to meet both domestic and global standards.
- Formulation & R&D Capabilities- The ability to develop innovative formulations (capsules, softgels, powders, functional beverages) is vital. A manufacturer with a strong R&D team and pilot-scale setups can offer customised solutions, giving your product a competitive edge.
- Quality Control & Documentation- Reliable QC infrastructure is needed for raw materials, in-process checks, stability studies and batch records. Well-maintained documentation, Certificates of Analysis (COAs) and traceability enhance trust and reduce risk.
- Production Capacity & Flexibility- Does the manufacturer have the right scale for your current order volume and the flexibility to scale up? Ensure turnaround times, handling of multiple formats and seasonal demand fluctuations are manageable.
- Packaging & Format Innovations- Consumer-facing nutraceutical products often demand attractive and functional packaging—gummies, sachets, effervescent tablets, etc. Manufacturers who offer modern packaging formats and private label design support enhance brand value.
- Supply Chain & Raw Material Sourcing- Since many nutraceuticals rely on herbs, botanicals, vitamins and minerals, ensure the manufacturer has robust supplier networks, traceability and quality assurance for bulk sourcing. India’s abundant raw-material base is an advantage.
- Export Readiness & Market Access- If you plan to export, check whether the manufacturer has experience with international markets, understands export documentation, customs, and global regulatory standards. This can expedite your global expansion.
- Cost Structure & Minimum Order Quantities (MOQs)- While cost matters, value and quality matter more in this sensitive sector. Transparent costing, clear MOQs, packaging charges and logistics support should be discussed upfront to avoid surprises.
By thoroughly evaluating these factors, you can partner with a third-party manufacturer that not only produces your products efficiently but aligns with your brand’s quality, regulatory and growth expectations.