India represents about 20% of the global generic drug offers and produces about 60,000 generic brands in 60 categories.
The plan comes against the background of the center of the center to the mass production (PLI) scheme for generic medicines by including multiple molecules used in manufacturing key starting materials (KSM), intermediates of drugs and active pharmaceutical components (API).
KSMS and intermediates are chemical compounds used to synthesize API, which are the main components of the drug.
“The government is working on a plan to store a minimum import price on all pharmaceutical products based on PLI. The plan is to protect the domestic industry so that they can continue business and make India independent,” one of the two people said.
The measure seeks to build on the recent success of India with domestic critical antibiotics production, such as Penicillin G. The API industry is a key segment of the pharmaceutical sector, which is about 35% of the market. However, India depends on imports for 80% of its volume requirement for drugs.
Reinforcement of self -confidence
The aim of this step is also to strengthen the goal of India’s independence in the pharmaceutical sector. Severe dependence on China, the largest producer in the world and the API exporter, creates significant risks for the Indian supplier chain of medicine.
In 2021 the government launched £15,000 CRORE PLI Scheme for pharmaceutical sector. There are about 500 API manufacturers in India, which represent about 8% of the global API industry.
In addition, the production of APIs for basic drugs is also supported through a specialized PLI scheme for bulk drugs, KSMS and API. The government is looking for new applications because the previous iterations of the PLI system did not meet expectations for dumping cheap commodities from China.
These programs are aimed at protecting and stimulating the production of domestic components, which are considered to be a critical step in ensuring future growth and stability of the Indian pharmaceutical sector.
According to the other person, the plan is a direct response to the appeal of the API domestic industry, which tried to compete with the low prices of Chinese products.
“In fact, the industry needs protection as some anti -dumping measures and MIPs to make India independent,” said the other person referring to the practice where the country “interprets” its exports in other countries at prices that are lower than what it costs to make these goods.
Exports marginally higher
According to the Ministry of the Ministry of Commerce, India recorded a modest trade surplus in mass drugs and intermediates in FY25, with exports in total $ 4.90 billion and imports to $ 4.64 billion. In FY24, exports were $ 4.79 billion, which is slightly before importing $ 4.56 billion, which again resulted in excess. Similarly, in FY23, exports were $ 4.77 billion compared to the import of $ 4.51 billion, which continues the trend of a positive trade balance in this segment.
The Indian Drug Manufacturers Association (IDMA) demanded cautious and data access to the proposal to introduce minimal import prices for selected APIs and KSMS. The industrial body warned the government against the area of business measures.
“We believe that data should be considered, a well -studied and balanced approach,” said Viranchi Shah, National spokesman for IDMA.
While this step aims to deter cheap imports and support the domestic pharmaceutical industry, Shah warned that the Indian strong position in the export of finished formulation must not be endangered.
“The minimum import price should not be as a flat strategy across the album, as India also has a very strong formulation industry,” he said. “Our industry must remain competitive both on domestic and globally.”
Idma repeated her support to government independent pressure in the campaign “Atma-Nirbhar Bharat”, but urged political planners to ensure that business interventions like MIP do not end with braking Indian exports by being more expensive.
Questions sent by the Ministry of Trade and the Ministry of Pharmaceuticals on Friday and the China Embassy in Nový Delhi on Saturday remained unanswered until the press.
China dependent
Ajay Srivastava, co-founder of the Global Trade Research Initiative (GTRI) initiative, said the Indian chemicals and the pharmaceutical sector-kirty play a key role in health, agriculture and industry-it is strongly dependent on imports from China.
“This increasing dependence not only exposes India vulnerability of the supply chain, but also raises significant strategic concerns, especially in the current global climate, where geopolitical tensions and disruption of trade are increasingly common.
The Gtri report of April 2024 states that imports of Indian chemicals and medicines have reached $ 54.8 billion in FY2024. Between 2007 and 2022, China’s share in these imports increased sharply from 18% to 29%, with imports from China increasing almost four times – from $ 4.4 billion to $ 17.4 billion.
Although imports from other countries have also caused, severe dependence on China remains the main strategic problem. In 2022, Indian chemical and pharmaceutical imports were a total of $ 76.94 billion, with China representing 26.8%, followed by Saudi Arabia, USA, Japan and Russia.
In 2007-10 there was a significant increase in imports of antibiotics out of $ 551.2 million to $ 1.27 billion in the years 2020-22, an increase of 130.7%. Here, too, the market share in China climbed to 81.7%and emphasized the high dependence on Chinese pharmaceutical products necessary to solve the extended public health needs in India.
Control tool
The minimum import price is a tool used by countries to check excess imports. Based on the example of India, MIPS has used MIPS to limit the import of steel and agricultural products such as onions and impulses.
By filtering extremely cheap imports, MIP also helps maintain quality standards and ensure that only manufacturers who are able to meet the cost and quality standards give the API to the Indian market.
“Although such a measure could lead to a short -term increase in the initial cost of drug manufacturers addicted to Chinese supplies, this is considered a necessary step to strengthen the domestic pharmaceutical ecosystem and reduce strategic vulnerability,” said Abhash Kumar, business economist and associate professor of economics.
Also read | India eyes Asean to strengthen the export of pharmacy
MIP is not directly prohibited according to the WTO rules, but may face challenges if used unfairly or for a longer period of time. The WTO also allows for rules based on tariffs or anti -dumping duties supported by formal investigation.
India imposed MIP on steel in 2016, but later replaced by corrective measures such as warranty duties.
(Tagstotranslate) Minimum import price
