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Indian API industry sees Make in India and PLI to curtail imports from China

Nandita Vijayasimha, Bengaluru
Monday, March 4, 2024, 08:00 Hrs  [IST]

Indian active pharmaceutical ingredient (API) industry is of the view that the Make in India initiative and the PLI (production linked incentive) scheme will help limit imports from China.

According to Rakesh Reddy, managing director, Aparna Pharmaceuticals, the implementation of the PLI scheme, coupled with a strategic industry perspective aimed at decreasing reliance on China, is motivating Indian API companies to localise production of intermediates and KSMs (key starting materials) while enhancing their competitive edge in the foreseeable future. Overall, this scheme encourages innovation and collaboration.

The current landscape of the Indian API market is characterised by a significant degree of fragmentation. Within this space, numerous manufacturers are diligently working towards broadening their market presence through the implementation of diverse business tactics including alliances, facility enhancements, and regulatory approvals, he added.

To bolster the domestic market in accordance with its Make In India appeal, the government introduced initiatives aimed at boosting the domestics manufacturing of APIs as well as other critical drugs which have since favourably impacted market expansion, he noted.

To this end, the government has allocated over Rs. 20,000 crore and a key component of the Budget 2024 too was the provision of PLI to companies that commit to investing in the domestic manufacturing of crucial KSMs necessary to produce APIs used in medications for diabetes, tuberculosis, steroids, and antibiotics. This strategic effort is anticipated to drive market expansion in the foreseeable future, Reddy told Pharmabiz in an email.

The projected size of the Indian API market stands at over US$ 13.5 billion in 2024, with an expected growth of over US$ 20 billion by 2029. This represents a compound annual growth rate of 8.3% over the forecast 5-year period.

The increasing prevalence of infectious diseases, genetic disorders, and chronic conditions are envisaged as a primary catalyst to drive market expansion. In the case of diabetes, it is estimated that by 2030, over 90 million people in India are projected to have this lifestyle disorder. Now this has underscored the importance of intensifying efforts towards the development of advanced pharmaceuticals necessitating a significant volume of APIs. Additional growth drivers seen are the expanding elderly demographic and the increased domestic manufacture of generic drugs, noted Reddy.

The global crisis following the Covid-19 pandemic had far-reaching impact on the pharmaceutical supply chain, resulting in disruptions for distribution of APIs coming in from China. It resulted in shortage of vital raw materials sourced from China for the production of medicines for HIV, cancer, epilepsy, and malaria, as well as antibiotics and vitamin supplements. Consequently, there was a noticeable shortfall of essential medicines across India, particularly in the cardiovascular and antibiotic categories. This led to a rise in the cost of numerous prescription medications, said the Aparna Pharmaceuticals chief.

Further, there is also a growing emphasis from the government to uphold quality standards within the domestic market. This shift is anticipated to promote greater consolidation and increased market share for key players who prioritise quality, said Reddy.

 




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