Low Price API from China in War with Indian Pharma Industry but Pushed
Downstream Production
The
API coming from China started getting dumped in India at very low prices.
·
41
products were included in this PLI scheme for the API sector, with special emphasis
on medicines for diabetes, tuberculosis, steroids and antibiotics; and an amount
of ₹20,000 crore was proposed.
·
Companies
like Aurobindo Pharma Limited, Torrent Pharmaceutical etc. have started their production
units for its production. It is believed that Aurobindo Pharma will start production
of Penicillin-G API in April 2024 and Torrent by June-July 2024.
·
Self-reliance
in most APIs, due to which dependence on China has come down. By September 2023,
under the PLI scheme, pharma companies had been given investment permission for
nearly ₹4,000 crore in APIs and ₹2,000 crore for medical equipment.
·
According
to a report, the price of API of popular fever medicine Paracetamol, which had reached
₹900 per kg during the Covid period, has now come down to just ₹250
per kg.
·
Two
Indian companies named United Phosphorus Limited (UPL) and Hindustan Chemical Limited
(HCL) have set up plants at a cost of ₹500 crore with the aim of self-sufficiency
in ‘Sodium Cyanide’ in the country.
·
Director
General of Trade Remedies (DGTR) of Ministry of Commerce and Industry, has proposed
anti-dumping duty on imports from China and European Union for Sodium Cyanide.
API is the essential materials used in drug
manufacturing are known as Active Pharmaceutical Ingredients or API. Till the year
2000, the APIs required in the field of drug manufacturing were mostly manufactured
in India. There was also necessary competition among their manufacturers in the
country, due to which drug manufacturers used to get APIs easily and at a reasonable
price in the country.
China started destroying India's API sector
as part of a conspiracy. The API coming from China started getting dumped in India
at very low prices. The result was that India's API industry no longer remained
competitive and our API units gradually started closing down. Here's an example:
The API of an antibiotic drug Amoxicillin is a derivative of Penicillin-G which
was produced in sufficient quantity in India and its international price was about
$ 22 per kilogram. But China started dumping this API at less than $ 9 per kg. Due
to this, the units making this API in India were forced to close. Once the Indian
factories closed down, China started selling this API first at double and then at
four times the past price.
The situation was almost the same for other
APIs and many APIs were sold at 10 to 20 times the old price. For example, the price
of folic acid, which is used to make vitamin tablets, was increased by more than
13 times. Such was the situation with almost all APIs.
Self-Reliance in APIs
In May 2020, Prime Minister Narendra Modi
launched the Atmanirbhar Bharat Abhiyan with the aim of
reviving industries whose production was disrupted due to dumping by China and other
countries and to promote manufacturing in the country, with an aim to eliminate
dependence on foreign countries. APIs were among the 13 categories of goods initially
identified for this. One of the important measures adopted for self-reliance is
known as Production Linked Incentives (PLIs). It is worth noting that 41 products were included in this PLI scheme for the API sector,
with special emphasis on medicines for diabetes, tuberculosis, steroids and antibiotics;
and an amount of ₹20,000 crore was proposed for it. The scheme was notified
on 21 July 2020.
It is a matter of satisfaction that this
scheme has started achieving its goal and the country is moving fast towards self-sufficiency
in the field of pharmaceutical industry. For example, the production of Penicillin-G,
which was halted in India, due to which Indian industries were forced to pay through
their nose for this API, now companies like Aurobindo Pharma
Limited, Torrent Pharmaceutical etc. have started their production units for its
production. It is believed that Aurobindo Pharma will start production of Penicillin-G
API in April 2024 and Torrent by June-July 2024. Health Minister Mansukh Mandaviya says that due to the PLI scheme and other efforts,
today India has achieved self-reliance in most APIs, due
to which dependence on China has come down. By September 2023, under the PLI scheme,
pharma companies had been given investment permission for nearly ₹4,000 crore
in APIs and ₹2,000 crore for medical equipment. Apart from this, the Centre
has developed three bulk drug parks at a cost of ₹3,000 crore.
Prices have started falling
As positive results of self-reliance in the
field of APIs have started coming, the prices of APIs have also started falling.
According to pharma industry experts, the prices of APIs have come down by 50% since
the time of Covid, out of which the fastest reduction has come in the last two months.
It can be understood that when the efforts of self-reliance in the field of API
started during the Covid period, now they have started bearing fruits. According to a report, the price of API of popular fever medicine
Paracetamol, which had reached ₹900 per kg during the Covid period, has now
come down to just ₹250 per kg. Similarly, the price of asthma medicine
Montelukast Sodium has come down from ₹45,000 per kg to just ₹28,000
per kg. The price of API of antibiotic Meropenem has come down from ₹75,000
per kg to ₹45,000 per kg.
The Indian government, while being vigilant,
will have to make every possible effort to stop dumping in the field of APIs by
China. This applies not only in the case of APIs but also in the field of other
chemicals. According to experts of the chemical industry, two Indian companies named United Phosphorus Limited (UPL)
and Hindustan Chemical Limited (HCL) have set up plants at a cost of ₹500
crore with the aim of self-sufficiency in ‘Sodium Cyanide’ in the country. But
since these plants have been set up, China, European Union, Japan and South Korea
has started using their economic muscles to reduce the landed price of Sodium Cyanide,
despite increase in their production cost. This is making production by UPL and
HCL economically unviable. Director General of Trade Remedies (DGTR) of Ministry
of Commerce and Industry, has proposed anti-dumping duty on imports from China and
European Union for Sodium Cyanide. But the process of getting such relief for the
industry is long and tedious, the country needs to create an expert intelligence
agency in the field of international trade so that any such situation of unethical
trade practice by foreign countries and their businesses, can be dealt with successfully.