(HT)
India plans to introduce a minimum import price (MIP) for select pharmaceutical raw materials in a move to shield its domestic industry from a flood of cheap Chinese imports, two people directly involved in the process said, a step that will also shore up India’s status as the world’s largest supplier of generic drugs.
India accounts for about a fifth of the global supply of generic drugs, manufacturing about 60,000 generic brands, across 60 categories.
“The government is working on a plan to impose a minimum import price on all PLI-based pharmaceutical products. The plan is to protect the domestic industry so that they are able to continue to do the business and to make India self-reliant,” said one of the two people mentioned above.
The plan comes against the backdrop of the Centre’s move to bulk up its production-linked incentive (PLI) scheme for generic drugs by including more molecules used in manufacturing key starting materials (KSMs), drug intermediates, and active pharmaceutical ingredients (APIs). KSMs and intermediates are chemical compounds used to synthesize APIs, which are the main components of a drug.
The measure seeks to build on India’s recent success with domestic production of critical antibiotics such as Penicillin G. The API industry is a crucial segment of the pharmaceutical sector, accounting for about 35% of the market. However, India is dependent on imports for 80% of its bulk drug requirement.
The move also aims to bolster India’s goal of self-reliance in the pharmaceutical sector. The heavy reliance on China, the world’s largest producer and exporter of APIs, creates significant risks for India’s medicine supply chain.
According to the second person, the plan is a direct response to appeals from the domestic API industry, which has struggled to compete with the low prices of Chinese products.
“Actually, industry needs protection like some anti-dumping measures and MIP to make India self-reliant,” the second person said.
In 2021, the government launched the ₹15,000 crore PLI scheme for the pharmaceuticals sector. There are about 500 API manufacturers in India. The production of APIs for essential medicines is also promoted through a dedicated PLI scheme for bulk drugs, KSMs and APIs. The government is seeking new applications as the previous iteration of the PLI scheme failed to meet the expectations due to dumping of cheap commodities from China. These schemes are aimed at protecting and encouraging domestic ingredient manufacturing.
The Indian Drugs Manufacturers’ Association (IDMA) called for a cautious and data-driven approach to the proposal for imposing minimum import prices on select APIs and KSMs. The industry body has warned the government against a blanket application of the trade measure.
“We believe that a data-backed, well-studied and balanced approach should be considered,” said Viranchi Shah, national spokesperson for IDMA.
Queries sent to the spokespersons of India’s commerce ministry, and department of pharmaceuticals on Friday and the Embassy of China in New Delhi on Saturday remained unanswered till the press time.
