UNHEALTHY DEPENDENCE

INDIA EXPORTS PHARMACEUTICALS WORTH $30.5 BILLION ANNUALLY BUT REMAINS HEAVILY DEPENDENT ON CHINA FOR RAW MATERIALS. THIS IS EMERGING AS ONE OF THE BIGGEST CHALLENGES TO THE COUNTRY'S HEALTHCARE AND MANUFACTURING AMBITIONS

- BY NEETU CHANDRA SHARMA

IN A JAN AUSHADHI store in Patna, Bihar, a strip of paracetamol costs ₹3. An antibiotic course that might cost several hundred rupees at a private pharmacy is available for a fraction of that amount.

The government’s generic medicine network, which has crossed 10,000 stores, has become one of the most visible symbols of India’s healthcare ambitions by bringing medicines within the reach of millions. The medicines may be inexpensive, but the raw materials used to make them are heavily imported, largely from China.

India supplies generic medicines to more than 200 countries. Pharmaceutical exports reached $31.1 billion in FY24, 16 times the $1.9 billion in FY01. But this has been accompanied by a worrying rise in raw material imports.

Industry estimates suggest that 70-80% active pharmaceutical ingredients (APIs) used by Indian pharmaceutical companies are imported, with China accounting for the bulk of those supplies.

“China operates massive, fully depreciated mega plants and controls the basic upstream chemicals. Domestic key starting materials and intermediates remain significantly more expensive. As a supplier of affordable medicines, Indian pharma cannot sacrifice its cost competitiveness. Until it builds a fully integrated ecosystem, from basic raw materials to cheap utilities, the reliance on imported inputs will remain an economic reality rather than a choice,” says Salil Kallianpur, pharma analyst and former Executive Vice President at GSK. China accounted for 43.45% of India’s pharmaceutical imports by value in 2023-24, amounting to $3.6 billion, according to the Pharmaceutical Exports Promotion Council.

For some products, the dependence is deeper. Government data shows that Chinese imports accounted for 77% of India’s Penicillin G imports in FY24. For 6-APA, a critical antibiotic intermediate, the figure was 94.1%.

WHY THE DEPENDENCE?