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India’s pharma dependence on China gets a cut, via duties

The government in January 2016 notified the withdrawal of exemption in customs duties given earlier to certain categories of drugs and bulk drugs.

By: ENS Economic Bureau | New Delhi | Updated: August 16, 2016 2:44:03 am

India’s increasing dependence on imports from China for many key raw materials (mostly intermediates and some active pharma ingredients) that go into the making of a number of essential drugs has been cited as an area of concern for policymakers. In view of this, and to further encourage domestic production of bulk drugs, the government in January 2016 notified the withdrawal of exemption in customs duties given earlier to certain categories of drugs and bulk drugs. This step is expected to help the country reduce its dependence on China for imports of certain essential Active Pharmaceutical Ingredients (APIs), officials involved in the exercise said.

According to a Boston Consulting Group (BCG) and Confederation of Indian Industry (CII) report, the drugs for which APIs come from China include the painkillers such as paracetamol; antibiotics such as Amoxicillin and Ampicillin, Cephalexin, Cefaclor, Ciprofloxacin, Ofloxacin, Levofloxacin; first line diabetes drug Metformin and medicines such as Ranitidine.

Apart from China, where imports have seen a consistent increase, other countries from where India imports APIs have not seen a consistent rise in imports (with the exception of Singapore).

According to the 2014 BCG-CII report, there are no domestic producers left for a number of drugs such as Penicillin-G, and its derivative 6-Aminopenicillanic acid, or 6-APA, making India dependent on imports for key intermediates used in many essential antibiotics, including semi-synthetic penicillin and semi-synthetic cephalosporins.

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The report underlines the risks of such over-dependence on China for critical raw material and commonly used drugs. Any supply risk, in terms of shortage of these advanced intermediates, as had happened in the run-up to the Beijing Olympics, threatens the production of APIs and can affect the manufacturing of critical drugs to a halt, it had said.

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