Assocham study finds India overdependent on China for medicines
India may have emerged as a key supplier of
generic and affordable medicine for the world market, but it has an
“overwhelming dependence” on China for the raw material required to produce
these drugs, industry association Assocham said.
Indian companies depend on China to supply
them with the main raw material in drug making — known as Active Pharmaceutical
Ingredient (API). The dependence is to the extent of over 65 per cent, an
ASSOCHAM-RNCOS joint paper said.
Though the government has taken steps like withdrawal
of exemption in customs duties, imports worth Rs 13,853 crore in 2015-16 or
65.29 per cent of the total imports of Rs 21,216 crore are not sustainable, the
association said.
“This
is all the more disconcerting in the face of louder narrative against reducing
trade gap with China which is well over USD 51 billion,” it said.
The API is the organ by which active
pharmaceutical ingredients are manufactured from raw materials through both
chemical and physical means.
Rapid growth in new medical technologies is
spurring the demand for APIs worldwide today with the increased import of raw
pharma ingredients from the emerging markets.
“India’s rising dependence on imports from
China for many APIs that go into the making of a number of essential drugs has
been cited as an area of concern for the policy makers”.
“Over-dependence
on China for APIs is likely to affect the bulk drug manufacturing sector, and
subsequently have an impact on our population in plausible scenarios of drug
shortages brought down by interrupted imports from single source country”, ASSOCHAM Secretary
General Mr D S Rawat said, adding over-dependence on such a crucial
raw material on a single country is also not advisable from India’s overall
strategic interests as well.
One of the main reasons for huge API imports
from China is low cost of its manufacture and subsidy in China while India
levies negligible import fee. “The import
fees should be increased in line with other counterparts”, the paper said.
The chamber said there is presence of
multiple regulatory authorities for the industry. The API manufacturers have to
approach different authorities for renewal of licences that become a tedious
affair.
“Therefore
a single committee of various government departments should be formed to
regulate the industry through a single window and audit of plants”.
Besides, the Centre can focus on development
of mega parks for APIs across the country. These parks should be provided with
common facilities such as effluent treatment plants, testing, power plants, IPR
management and designing. These facilities should be maintained by special
purpose vehicles.
Several other countries like China provide
incentives and subsidies for promoting the manufacture of essential
pharmaceutical raw material. This significantly reduces their cost of
production and ability to supply API to the world market at a huge discount to
the global prices. This discourages new domestic investment in the sector.
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