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Can India be globally competitive – API manufacturing hub – Challenges & opportunities

For a country hailed as the pharmacy of the world, the recent revelations on vulnerabilities and dependence for critical drug inputs vis-à-vis China has been a rude yet timely reminder. Even as authorities scramble to negotiate the ongoing pandemic, the government has also mounted a vigorous drive to achieve broader economic self-reliance inherently entailing measures to curtail the Chinese API dependence. With respect to APIs, it has already set in motion a series of initiatives including revival/establishing of clusters, offering production-linked schemes and other related measures with a view to bolster India’s API-production capacity and indeed turn India into a globally competitive API manufacturing hub.

However, notwithstanding the government’s intent and vigour, the road to making India the epicentre of global API production is not likely to be easy. There will be roadblocks and challenges as also a few opportunities which should arise along the way. What are those challenges and opportunities and whether the authorities can overcome the challenges while capitalising on the opportunities to make India an API production powerhouse?

The BIG API Challenge

Persisting dependence for KSMs and solvents on China Despite the initiatives on indigenisation of APIs, India is still largely dependent on China for Key Starting Materials (KSMs), the basic building blocks for making APIs. In a possible bid to diminish India’s self-reliance drive for APIs, China has recently raised the prices of KSMs by 10 to 20 percent with an eye on deterring domestic manufacturing of APIs. 1 Similarly, since a majority of API syntheses require pharmaceutical solvents such as methanol and isopropanol, among others – chemicals used in the manufacturing of drug, extraction, and purification processes – the continued dependence on China for their supplies again is a dampener.

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