Imports of bulk drugs from China slowed down

India's dependence on imports from China for synergistic pharmaceutical ingredients (APIs) and intermediates used in making drugs will take some time to reduce, but the pace of growth in imports has already started to slow. The Production Linked Incentive (PLI) scheme for bulk drugs (APIs) has increased the production of some major APIs in the country.

According to data from the Pharmaceutical Export Promotion Council (Pharmaxil), India imported APIs and intermediates worth $3.18 billion from China in 2022-23, up 1.74 percent from the previous year. In 2021-22, India imported $3.12 billion worth of APIs and intermediates from China, a 19.5 percent increase over 2020-21. Thus, imports are increasing but the rate of growth is very low.

On the other hand, India's imports of bulk drugs and intermediates from the world declined by 4.54 percent to just $4.5 billion. Due to this, imports increased by nearly 23 percent to $4.7 billion in the last financial year.

The real impact of increasing production capacity of bulk drugs due to PLI scheme will be visible after few years.

India has initiated concerted efforts to reduce dependence on API imports from China and increase production within the country. The results of the scheme are beginning to show but it will take 5-7 years to reduce the entire dependency.

But the domestic pharma industry says that imports of only certain products are declining.

The Indian Drug Manufacturers Association, which represents small and medium pharmaceutical companies, said that before the PLI scheme, only one factory was manufacturing para amino phenol (used to make paracetamol). India was dependent on China for this essential drug, which was widely used during the Covid pandemic. But now para amino phenol is being manufactured in at least three-four factories.

China has also revised the prices of key ingredients, bulk drugs and other chemicals in view of rising production in India, industry sources say. Therefore, Indian pharmaceutical companies will gradually reduce their dependence on China while there is a lot of production capacity for larger products.

Once the manufacturing base is in place in the country, the Center can create barriers to imports through duties, allowing formulation companies to buy goods from here as well. As of February this year, around 22 major API-building projects had come under the ambit of the PLI scheme. They have a finished production capacity of over 33,000 tonnes.

These companies are major bulk manufacturers of para amino phenol, atarvastatin (cholesterol drug) and sulfadiazine, common antibiotic APIs like levofloxacin, norfloxacin and ofloxacin, vitamin APIs, common blood pressure lowering drugs like valsartan and antiviral drugs like lopinavir (for HIV patients).