Bulk drug imports from China drop after govt scraps customs exemption

FY17 imports lowest in 3 years, exemption withdrawn to provide level playing field to domestic units

Bulk drug imports from China dropped to Rs 9,120.8 crore in 2016-17 from 13,853.20 crore a year ago, following the government's withdrawal of customs duty exemption on certain categories. The exemption was withdrawn to provide a level playing field to domestic manufacturers.

"This is the lowest in three years," informed Mansukh Lal Mandaviya, the Minister of State for Chemical and Fertilisers in Parliament today. In 2015-16, India imported bulk drugs worth Rs 13,853.20 crore, while in 2014-15, the figure was Rs 12,757.96 crore.

Imports from China have come down even as the domestic formulation industry has grown by about 10 per cent, as per India Drug Manufacturers Association (IDMA). The industry body feels that India is still not out of the woods. "More than 60 per cent of the bulk drugs are still imported from China," says Deepnath Roy Chowdhury, president, IDMA. "We urgently need to further bring down the dependence, as the situation can be disastrous if China stops exporting."

Bulk drugs are the basic blocks that are used to create formulations. For example, Paracetamol or Ibuprofen are bulk drugs used in creating analgesics. The Indian pharmaceutical industry feels that regulatory environment is not conducive for Active Pharmaceutical Ingredient (API) manufacturing in India. They cite delay in environmental clearances, high cost of land as the reasons for not being able to manufacture bulk drugs at competitive prices.

India is also dependent on China to ensure there is no shortage of drugs for rare ailments like Wilson's disease. While there is no shortage now, India has been importing considerable amount of Pencillamine from China. As per a senior government official, "The country imports at least 250 kg of pencillamine bulk drug a month from China." To ensure that there is no shortage in the country, the Department of Pharmaceuticals has also invoked Section 3(i) of the Drug Price Control Order (DPCO) 2013. According to this section, no company can bring down manufacturing of the said drug.

About Rs 438 crore worth bulk drugs of Penicillin was imported this year. It is a compound that can cure pneumonia, diphtheria and meningitis, among other diseases. This is a marginal decrease from what was imported last year.

The import of Ibuprofen API that makes analgesics has come down considerably from Rs 116 core in 2015-16 to Rs 52.40 crore in 2016-17. The government has been trying to set up clusters for the manufacturing of bulk drugs. Late last year, the Department of Pharmaceutical issued an expression of interest for the fourth time as the first three times the industry did not show much enthusiasm.