As China stumbles, India plans big exports push in bulk drugs

  • 01-May-2020
  • As China stumbles, India plans big exports push in bulk drugs

The government is mulling fiscal incentive and capital subsidy for reviving and restarting old active pharmaceutical ingredient units in a bid to make India an alternative hub for bulk drugs at a time when China faces quality as well as trust issues.

“China today controls 55% of API space in the world. With China facing quality issues, India can take a lead and plan big for exports,” a senior government official told ET. The government is also looking to chart strategies to turn the country into a major exporter of medical textiles, furniture, electronics, and toys, among other products, in the next six months, officials said.

The commerce and industry ministry had on Wednesday held a video-conference with industry experts of various sectors, asking them to draw up plans to take over areas where China has vacated space, they said.

While the Cabinet had last month approved a ?10,000-crore incentive-based scheme to boost domestic manufacturing of APIs — a key raw materials for drug manufacturers — by setting up bulk drug parks, industry insiders said reviving old units is the only solution to boost production in the short term. “I firmly believe that there is no dearth of talent, entrepreneurial spirit, technology, automation and other ingredients of manufacturing API, including intermediates, in India,” said Dinesh Dua, chairman of Pharmaceutical Export Promotion Council (Pharmexcil) that functions under the commerce and industry ministry.

He said old existing API entrepreneurs “can be motivated through fiscal incentives in terms of capital subsidy, capex, with two years moratorium and three years interest-free EMIs”.

“In addition, as already announced by the government of India, incremental incentive may be provided for all 53 KSMs (key starting material, which are building blocks for APIs) and APIs for which we are vulnerably dependent on imports,” Dua said.

To attain self-sufficiency in bulk drugs, reduce dependence on China, and expand its market to other countries, the government is contemplating ways to encourage domestic manufacturing of APIs by creating suitable ecosystem in the country with focus on fiscal and procedural support to pharma companies to kick-start production of intermediates.

It has been mulling build API production capacity for the 58 APIs on which India is significantly dependent on China.

Other than pharma, medical textiles, furniture, electronics, and toys are some sectors where the government is deliberating to take centre stage, in the next six months. Industry say that India has been dragging its feet for far too long. “India also set out to encourage local manufacturing of bulk drugs (active pharmaceutical ingredients, or APIs) by declaring 2015 as the Year of APIs, but there has been little progress on the ground,” said one of the pharma experts, on condition of anonymity.

Meanwhile, Bangladesh in May 2018 announced a corporate tax holiday for API and laboratory reagent manufacturers till 2032.


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