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Business EconomyPosted at: Oct 17 2016 9:27PM


Over-dependence on China for key pharma raw material worrying: Study

Kolkata, Oct 17 (UNI) India may have emerged as a key supplier of generic and affordable
medicine for the world market, its overwhelming dependence on China for a crucial raw
material, known as Active Pharmaceutical Ingredient (API) to the extent of over 65 per cent
of the requirement, has emerged as a main worrying area, an ASSOCHAM-RNCOS joint
paper has noted.
This is all the more disconcerting in the face of louder narrative against reducing trade gap
with China which is well over USD 51 billion, adds the ASSOCHAM study.
The API is the organ by which active pharmaceutical ingredients are manufactured from
raw materials through both chemical and physical means. While rapid growth in new medical technologies is spurring the demand for APIs worldwide today with the increased import of
raw pharma ingredients from the emerging markets, “ India’s rising dependence on imports
from China for many APIs that go into the making of a number of essential drugs has been
cited as an area of concern for the policy makers”.
Though the government has taken steps like withdrawal of exemption in customs duties,
imports worth Rs 13,853 crore in 2015-16 or 65.29 per cent of the total imports of Rs 21,216
crore are not sustainable.
“Over-dependence on China for APIs is likely to affect the bulk drug manufacturing sector
and subsequently have an impact on our population in plausible scenarios of drug shortages
brought down by interrupted imports from single source country,” ASSOCHAM Secretary
General D S Rawat said, adding over-dependence on such a crucial raw material on a single
country is also not advisable from India’s overall strategic interests as well.
One of the main reasons for huge API imports from China is low cost of its manufacture
and subsidy in China while India levies negligible import fee . “The import fees should be
increased in line with other counterparts,” the paper said.
The chamber said there is presence of multiple regulatory authorities for the industry. The
API manufacturers have to approach different authorities for renewal of licences that become
a tedious affair. “Therefore a single committee of various government departments should be
formed to regulate the industry through a single window and audit of plants”.
Besides, the Centre can focus on development of mega parks for APIs across the country.
These parks should be provided with common facilities such as effluent treatment plants, testing,
power plants, IPR management and designing. These facilities should be maintained by special
purpose vehicles.
Several other countries like China provide incentives and subsidies for promoting the
manufacture of essential pharmaceutical raw material. This significantly reduces their cost of
production and ability to supply API to the world market at a huge discount to the global prices.
This discourages new domestic investment in the sector.
UNI BM RSA 2127
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