Pharma Industry to depend on low cost Chinese APIs due to these reasons

The main reason for India’s dependence on Chinese API and other key starting materials is rising costs of production

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Last Updated on November 18, 2021 by The Health Master

The Bulk Drug Manufacturers Association (BDMA) has expressed concern that the ever rising costs of production due to scale of operations, inadequate industrial and environmental infrastructure and high energy and fuel costs are forcing Indian pharma companies to import low cost APIs from China.

While sharing his views, as to why the Indian pharma industry is depending on China for more than 80 per cent of APIs and other raw materials, BDMA president R K Agrawal said that the cost of input raw materials in India is more than 15 per cent compared to that of China.

And therefore the Indian pharma industry has been long depending on the Chinese imports for its key starting materials, intermediates and solvents.

However, Agrawal felt that this kind of excess dependence on China or for that matter on any other country, is not a good scenario and said that it is high time the Indian policy makers and the pharma industry in the country work together charting action plan and devising strategies towards becoming self reliant and must take immediate steps to sustain the domestic bulk drug sector so as to deal with any kind of eventualities that may arise causing damage to our pharma sector in the future.

The main reason for India’s dependence on Chinese API and other key starting materials is rising costs of production. Compared to Chinese API sector, Indian API manufacturers are incurring 15 % more on input raw materials.

However, if our government can come forward and help the industry to overcome this input costs and help in building the adequate industrial infrastructure, the domestic bulk drug and API sector will definitely become viable and then the Indian pharma industry can not only become self reliant but can also take on with other global competitors like China and enhance our bulk drug exports to the other countries,” observed the BDMA president.

While enumerating the overall growth of the bulk drug manufacturing sector in India, Agrawal said that in spite of facing various hurdles, hardships and challenges, the Indian bulk drug industry is growing consistently and performing well.

“Except for excess dependence on China for some APIs and key raw materials, however the India’s bulk drug industry is growing consistently and it stands next only to China in manufacturing of bulk drugs globally.

To stop over dependence on china, Indian pharma industry needs to work back on manufacturing key intermediates and should become self-reliant in manufacturing of APIs,” opined Agrawal.

Giving statistics of bulk drug sector’s growth, the BDMA president said that for the financial year 2021, the direct export of bulk drugs and intermediates from India stands at $4.4 billion, whereas the imports of intermediates and API stand at  $3.8 billion. This is leaving aside the share of bulk drugs (about 25%) used in about $18.8 billion of exports of FDF and biologicals.

Considering all these, the overall size of Indian bulk drug and intermediate Industry is over and above $16 billion.

Stressing on the role of BDMA, Agrawal said that he will pursue the ongoing issues facing the industry and would work towards growth in exports and help initiate steps in the reduction in imports.

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