The Indian pharmaceutical industry is the world’s third largest by volume and thirteen largest in terms of value. The industry generates over USD11 billion of trade surplus every year and is amongst the top five sectors contributing to the reduction of India’s trade deficit.
The backbone of Indian pharmaceutical industry is the bulk drugs industry and is ranked the third largest in the world, and the country contributes approximately 57% of APIs to prequalified list of the WHO. However, over the past two decades, India’s reliance has grown for imports of low-cost intermediates and APIs. India imported around INR 249 billion worth of bulk drugs in FY19 as compared to INR193 billion in FY18. Imports from China have been on a steady rise over the years (from 62% in FY12 to 68% in FY19) as India imported INR169 billion worth of intermediates and APIs from China. High import dependency on a single nation is of concern to all stakeholders, including the Government for – health security, industry in terms of - raw material shortage, price hike, and lower margins and the end consumers regarding - drug shortage and spurious drugs.
This report, published by CII in partnership with KPMG attempts to capture the current state of the Indian bulk drug industry, identifies challenges, compares India and China and proposes recommendations to establish self-sufficiency in APIs.
The recommendations proposed have been formulated around four key pillars – providing ease of doing business, incentives and subsidies, infrastructure development and innovation and technical capability development. We believe these recommendations will help policy makers in implementation of the recently launched schemes and would establish self-sufficiency and export prowess in the API segment.