A Hard Pill to Swallow

DESPITE THE GOVERNMENT'S EFFORTS TO BOOST DOMESTIC MANUFACTURING OF VARIOUS DRUGS, RAW MATERIALS AND MEDICAL DEVICES, THEIR IMPORTS HAVE ONLY INCREASED. ON TOP OF THAT, UPTAKE OF THE PLI SCHEME IS MOVING AT A SLOWER-THAN-EXPECTED PACE

- NEETU CHANDRA SHARMA

SWELLING RESEARCH COSTS and import dependency— two major afflictions that India’s pharmaceuticals industry seemed helpless against until a few years ago. Hopes were raised when the central government unveiled a production-linked incentive (PLI) scheme in the middle of the pandemic to foster domestic production of key import items such as active pharmaceutical ingredients (APIs), the raw material for making a drug. The pandemic had stifled global supply chains and exposed India’s heavy dependence on China for its pharma requirements. At a time when basic raw materials for drug-making became scarce because of the lockdowns, India’s PLI scheme was aimed at muscling up the domestic $50-billion pharma industry and ringfencing it from Covid-19-like future black swan events and, in the bargain, reduce its dependence on China.

However, things have not panned out the way they were expected to; at least not yet. Almost three years since the PLI scheme was launched, India’s reliance on China for APIs and other pharma products has only increased. Per data from the Ministry of Chemicals and Fertilisers, the import of bulk drugs or APIs and drug intermediates (materials produced during API synthesis) from China rose 20 per cent from FY21 to `23,273 crore in FY22, which was 66 per cent of India’s total imports of medical products worth `35,249 crore that fiscal. And data from the commerce ministry shows that imports of 30 key medical devices have gone up by 25-152 per cent during April-December 2022 compared to a year ago.