With tension brewing between India and China, the Centre is readying guidelines to fast-track launch of the production-linked incentive (PLI) scheme to promote local manufacturing of active pharmaceutical ingredients (API) used in making medicine formulations.
India currently sources 70-80% of APIs and key starting material for drug formulations from China because of cost viability.
“We are ready with the guidelines for API incentive scheme and plan to kick-start it by July 1,” a senior official in the department of pharmaceuticals said. “The objective is to boost local manufacturing of critical APIs and in the current situation, it assumes prime importance. We are regularly holding meetings to ensure that the process of implementing the scheme is completed as early as possible,” the official added.
Pharmaceutical companies say supplies from China are running smooth so far, but with the evolving situation at the border, they are expecting an increase in API cost and even possible disruptions in supply.
“We are keeping a close watch on the situation. So far, we have not received any reports about any disruption in supplies and there is always inventory for a few weeks but if the situation worsens then there can be a crisis,” a senior executive with a pharma industry association said.
The government had in March approved a Rs 10,000 crore PLI scheme to reduce India’s dependence on China for raw materials to produce crucial antibiotics, anti-HIV drugs, vitamins and cardio medicines.
The government will provide Rs 10 crore each to domestic companies for setting up plants to produce 41 products covering 53 crucial APIs. The proposal says incentives will be given on condition that products must be manufactured with complete backward integration and supplied to domestic drug-makers only.