India's import dependence on key pharma ingredients may reduce by half

Two newly inaugurated units will manufacture important molecules used in several common antibiotics

India is seeking to bolster local production and cut its import dependence by half for critical pharmaceutical ingredients, especially from China, in the wake of the inauguration of two greenfield plants.

 

The two plants were inaugurated last month under the Production Linked Incentive (PLI) scheme for bulk drugs to reduce import dependence on key starting materials (KSM) and active pharmaceutical ingredients (API). 

They have been earmarked to manufacture Penicillin G, 6-APA (6-Aminopenicillanic acid), and Clavulanic Acid, important molecules used in several common antibiotics, whose production was stopped in the country for over two decades. 

 

  Anil Matai, director general Organisation of Pharmaceutical Producers of India (OPPI), stated that Penicillin G and Clavulanic Acid have historically been sourced primarily from China, leaving the Indian pharmaceutical sector vulnerable to external supply disruptions.  

With the inauguration of these facilities, the government and industry expect import dependence on these molecules to fall by around 50 per cent. 

The first plant, owned by Lyfius Pharma, a wholly-owned step-down subsidiary of Aurobindo Pharma is expected to manufacture 15,000 metric tonnes (MTs) of Penicillin G at its facility in Kakinada, Andhra Pradesh. 

According to import data  

shared by the Department of Pharmaceuticals (DoP), India imported Penicillin G and 6-APA worth Rs 2,066 crore and Rs 3,490 crore, respectively in FY24, of which Chinese imports stood at 77 per cent and 94.1 per cent. 

“The commissioning of the plant is expected to reduce India's import dependence for Penicillin G and 6-APA by 50 per cent,” a government communication added. 

The company also specified in a statement that of the 15,000 MT of Penicillin G to be produced by Lyfius, 3,000 MTs is planned for domestic sales, whereas another 12,000 MT would be used to make 6,000 MT of 6-APA, an intermediate for common antibiotics, such as Amoxicillin, Ampicillin, Piperacillin, Sulbactam, and Tazobactam. 

M V Rama Krishna, Director, Lyfius Pharma said that this facility represents a strategic investment of Rs 2,500 crore, under the PLI scheme. “The launch of our PenG facility is a significant milestone in our efforts to enhance local production and reduce import dependency for critical pharmaceutical ingredients,” he added. 

On the other hand, Mumbai-based Kinvan Private Limited (KPL) has started operations on its 400-MT plant in Solan, Himachal Pradesh to manufacture Clavulanic Acid, which is an important API used to produce bacteria-resistant antibiotics. 

“India is 100 per cent import dependent on Clavulanic Acid, with its estimated requirement in the country in the range of 1,000 to 1,200 MTs,” a government communication had said. 

Import figures suggest that of the Rs 517.25 crore worth of Clavulanic Acid imported by India in FY24, 85.3 per cent came from China. The project is now expected to facilitate import substitution by roughly 40 per cent of the requirement of Clavulanic Acid in the country. 

In reply to queries from Business Standard, the DoP stated these molecules are integral to antibiotic formulations, and the high dependence on China highlights the need for India’s initiatives to bolster local manufacturing capacity for these critical active pharmaceutical ingredients. 

“These facilities can position India as a major player in the global pharmaceutical supply chain, decreasing import dependency and enhancing cost-competitiveness in the production of bulk drugs,” the DoP added.