Although India is the birthplace of ayurveda, one of the most popular forms of herbal medication, the domestic market looks positively anaemic when compared with its healthy presence in the West.

Prescription herbal medicine, for instance, hasn't quite taken off in India. In fact, of the $1 billion herbal medicine market, almost 70 per cent constitutes over-the-counter (OTC) products, with only 30 per cent being prescription drugs.

While India is one of the largest producers of medicinal herbs, the market suffers from lack of clinical research, standardisation and regulation.

"Only those prescription medicines are doing well that are promoted and supported by standardisation and clinical research," says Durga Prasad of Dabur [Get Quote].

"However, there is not much data available on a large number of prescription medicines and hence this segment is taking a back seat," he adds.

But the OTC market has been growing steadily. The main drivers of this growth are medicines like analgesics and cough, cold and allergy remedies. Even herbal dietary supplements are fast gaining popularity.

"There are many reasons for growth of the OTC market, including increasing awareness of alternative and complementary medicine and the shift from curative to preventive healthcare," explains Philipe Haydon, COO (pharmaceutical division), Himalaya Drug Company.

With the marketing of the concept of wellness, the herbal medicine market in India is all set to look up and clock a growth rate of 12-15 per cent a year. The growth will also be driven by the upcoming medical cities that promise to provide consumers the option of herbal and ayurvedic treatments.

"Many pharma companies are now entering the herbal healthcare space due to its huge potential. Of course, there is a demand for scientifically researched and validated herbal medicine," says Haydon.

Most large ayurvedic pharmaceutical companies say that they make regular investments in research and they are growing. "Zandu Pharmaceutical Works [Get Quote] Limited," claims Anil Patel, brand manager with the company, "has seen an upward trend in sales with a y-o-y profit increase of 10-12 per cent."

Dabur is also promoting ayurvedic medicines with the help of eminent practitioners, through ayurvedic colleges and direct interaction with consumers.

Himalaya, meanwhile, relies heavily on doctor's prescription for its sales and product promotion. On the distribution side, it was one of the first companies to launch its exclusive outlets for greater consumer reach.

"The outlets are positioned as information kiosks and are an extension of the emerging concept of experimental marketing," elaborates Haydon. Besides serving as a billboard for the brand, the outlets have also allowed for greater customer relationship management for the company.

So, while innovative marketing and creating awareness  may be the answer to India's slow-paced herbal medicine market, most drug companies are having no problems with their export figures that are growing at 15-18 per cent per annum.