Only Centre’s handholding can reduce APIs’ dependence on imports

A recent survey conducted by the Centre for Market Research and Social Development (CMRSD) makes it clear that the country’s Active Pharmaceutical Ingredient (API) industry is in desperate need of handholding with regard to creating adequate infrastructure so as to reduce dependence on imports. The endeavour of survey, which was commissioned by the Department of Pharmaceuticals (DoP), was to assess current developments and adoption of technology as compared to global counterparts and explore opportunities to fill the technology gap.

It may be noted that imports of bulk drugs and drug intermediates from China have increased by around 20 per cent in the fiscal year 2021-22, accounting for almost 66 per cent of the total imports during the year. Total imports from China during the fiscal year 2021-22 was Rs 23,273 crore, as compared to Rs 19,403 crore in the previous fiscal. The growth of imports compared to financial year 2019-20 was almost 41.5 per cent in 2021-22, as the year 2019-20 reported imports of Rs 16,443 crore worth of bulk drugs and drug intermediates from China. In terms of quantity, imports from China were at 2.65 lakh metric tonne (MT) during 2021-22, as compared to 2.57 lakh MT in 2020-21 and 2.21 lakh MT in 2019-20. The total imports of bulk drugs and drug intermediates were at Rs 35,249 crore, which is 4 lakh MT during financial year 2021-22, as compared to Rs 28,529 crore at 3.90 lakh MT during the previous fiscal, registering a 23.55 per cent growth in terms of value.

In the year 2019-20, the country imported Rs 24,172 crore worth bulk drugs and drug intermediates, which was around 3.64 lakh MT in terms of volume.

Under this backdrop of increasing import of APIs from China, the survey’s finding is of great significance.

It was brought to the notice of DoP that the API manufacturing sector in the country lacks in infrastructure, skilled manpower, academic infrastructural support, logistics and connectivity related issues. Given this situation, it is imperative that the API industry is lent a hand-holding support from the government so as to firm up its foundation and reduce import dependence in the future. It is time the government helps in developing adequate infrastructure facilities apart from coming up with incentive schemes to encourage more investors into the segment.

The fact is that government support for R&D to reduce the import dependence is dismal. This has to be suitably enhanced on a priority basis.

The Centre is surely seized of the mater as it has already taken some initiatives to encourage domestic manufacturing of bulk drugs. Besides the PLI scheme, the Union government has launched a bulk drug parks scheme. The primary objective of this scheme is to provide easy access to bulk drug units and thereby effectively reduce manufacturing costs and optimize resources and economies. The promotion of such parks has a size of Rs 3,000 crore, providing aid for three drug parks or 70% of the cost behind the common infrastructural facilities and in the case of hilly areas, 90% the cost behind the common infrastructural facilities. These schemes will not only minimise dependence on imports but also simultaneously give fillip to indigenous manufacturing.

But that is not enough as the survey has highlighted that a majority of API manufacturing units are small scale enterprise (SMEs). As such, SMEs cannot afford to put high capital inputs to establish their units. In view of this, if the government can come up with incentive schemes and financial assistance to such SMEs, many more investors can come forward to set up their API units across India.

Special initiatives should be taken for preparing key starting materials from easily available indigenous materials. As the survey report states, the API manufacturing industry in the country follows routine optimized classical procedures for every API preparatory synthetic step.

This can be better addressed by modern chemistry and thereby green chemistry. This will largely reduce waste generation during API synthesis. The industry should join hands with academia to address this issue. Use of digitised supply chain management solutions can help keep track of a wide variety of information like origin of raw materials for APIs right up to reaching the patient. This has huge implications in medicine recall and quality control. The report added that India has the expertise to pioneer innovations and take the lead in due course. Obviously, the government should strengthen coal and petrochemical industry; take up measures to revive fermentation technology; promote continuous manufacturing; use artificial intelligence (AI) and modern chemistry; a research-linked incentive (RLI) scheme, a policy to enhance industry-academia linkage; incentive schemes and financial assistance to SMEs. The earlier the government acts on the survey report findings and recommendations, the faster will end import dependence of APIs.

(The author is freelance

journalist with varied experience in different fields)