India is one of the largest drug manufacturers in the world. However, despite its gigantic capability to churn out medicines on a large scale, the industry is dependent on Chinese companies for the raw material required to produce these drugs. But the sustained calls of boycotting Chinese goods in the aftermath of the Galwan valley clash has started to yield positive results as Indian pharma companies are actively looking for local or in-house makers of active pharmaceutical ingredients (API) to end their reliance on China.
According to a TOI report, executives at India’s Cadila Healthcare, Cipla, Sun Pharmaceutical and Biocon said on Tuesday they were aggressively working on reducing the dependence on the richer rival i.e China for raw materials.
If the disruption in the supply chain market in the aftermath of the COVID-19 pandemic was a reason for the Indian pharma cos to move away from China, the Galwan valley clash was the final straw.
“Because of the anti-China sentiment … most of the companies are working towards de-risking themselves in terms of making it clear that their supply chain linkages with China are limited,” said Gaurav Suchak, supply head of Cadila.
Cipla’s supply chief Swapn Malpani said it had launched an “API re-imagination” programme to possibly expand its own manufacturing capacities using recent government incentives such as production subsidies, apart from working with local suppliers.
As reported previously by TFI, the government had also introduced the Production Linked Incentive (PLI) scheme in the pharma sector last year to reduce dependence on the Chinese companies for raw materials.
In July, the government had notified the 7,000 crore rupees PLI scheme to promote domestic manufacturing of API or raw materials that are used to manufacture drugs. Furthermore, after receiving feedback from the industry experts, the government even removed the minimum investment limit of 400 crore rupees to seek PLI benefits.
The pharmaceuticals sector is among the fastest-growing sectors in the country with double-digit growth in the last few years. India is the third-largest manufacturer of drugs by volume and 14th largest by value. And, it also accounts for 3.5 per cent of the total drugs exported globally. The domestic capability for manufacturing is already there and all that the country needs is technological efficiency and also domestic production of API to become Atmanirbhar and a major exporting hub.
Read more: Modi government expands API scheme to kick China out of the Pharmaceutical sector
The fact that Big Pharma players are shunning the Chinese companies is a testament to PM Narendra Modi’s clarion call of ‘Aatmanirbhar Bharat’. The road ahead might not be easy as the infrastructure required to compete with China is still a ‘work in progress. However, the start has been encouraging and thus one can be optimistic about the pharma sector’s dreams of achieving self-reliance.