NEW DELHI: The government plans to tweak its newly proposed Rs 10,000-crore scheme to boost domestic manufacturing of active pharmaceutical ingredients (APIs) after its think-tank Niti Aayog suggested that the scope be widened to encourage exports of these bulk drugs, people aware of the matter told ET.
India is trying to encourage local manufacture of APIs, intermediates and key starting material used in the production of drugs and cut dependence on China. However, the scheme was meant to cater only to domestic demand and exports were restricted.
Several pharmaceutical lobby groups had also asked for exports of locally made APIs to be allowed. “While the idea was to satisfy the domestic demand so that India doesn’t have to rely on any other country, Niti Aayog and several pharma groups suggested that industry be allowed to export APIs, too,” said a person aware of the matter.
Pharma lobby groups, state drug controllers and senior officials from the department of pharmaceuticals and India’s drug regulatory authority discussed the matter in an online video conference on June 13.
“The majority of the pharma lobby groups were of the view that they should be allowed to export APIs,” another person said. “Niti Aayog is of the view that the move will help generate revenue. However, the thinktank is also of the view that such a step should be taken after making sure that we have enough to satisfy the demands of the country,” the people said.
India’s pharmaceutical industry is the third largest in the world and relies on China for crucial raw material to make drugs. The dependence makes Indian drug companies vulnerable to supply disruptions triggered by events such as the recent escalation of border tension barely a few months after the Covid-19 outbreak shut down trade channels.
The government proposes to provide incentives of `10 crore each to domestic companies that set up plants to produce 53 crucial APIs that are currently imported from China for making anti-TB drugs, steroids and vitamins, among others, for supply to domestic local pharma companies.
The government will disburse funds within 60 days of receiving a claim, according to a proposal by a panel of the department of pharmaceuticals. Companies with cost of production that’s comparable with or less than the import price of APIs will get priority, according to the proposal, which ET reviewed.
The benefits are part of a Rs 10,000 crore production-linked incentive scheme to boost domestic manufacturing of critical bulk drugs and APIs approved by the Cabinet in March.
