India's Pharma War Zone: How Delhi's Bulk Drug Push Is Rattling China

India.com

2 days ago

New Delhi: The heat is rising in India's pharmaceutical backrooms. Quiet factories. Long shifts. New chemical reactors humming across Himachal, Gujarat and Telangana. Something has shifted. China, long the uncontested supplier of India's drug ingredients, is suddenly nervous. Its prices are falling. Fast. Some slashed by 50%. This is no coincidence.
The trigger? India's Rs 6,940 crore Production-Linked Incentive (PLI) scheme. Launched in March 2020, it was a shot across the bow. And the target: reduce dependence on Chinese Active Pharmaceutical Ingredients (APIs). By December 2024, 48 domestic API projects were sanctioned. Of these, 34 are already operational. Together, they cover 25 key drug molecules. The investment so far? Rs 4,254 crore.
But the Chinese are not backing down quietly. They are throwing prices into free fall. Landed costs of certain APIs from China have collapsed far deeper than Indian prices. Take Atorvastatin, used in cholesterol pills, for instance. Indian API prices fell 17% to Rs 10,000 per kg. China pushed it down to Rs 8,000 per kg. That is a 33% crash.
Let's understand with another example of Ofloxacin, a broad-spectrum antibiotic. Indian prices dropped from Rs 3,200 to Rs 2,700. China? Rs 2,100. Down 30% in a year.
This is price war, not coincidence.
Bhavin Mukund Mehta, director of the Kilitch Drugs and Vice Chairman of Pharmexcil, minced no words, 'Even though the PLI has helped reduce the prices of domestically-produced APIs, the Chinese players are undercutting the competition in specific product categories to retain their market share.'
Behind the scenes, policymakers are reviewing the PLI's next phase. They are asked industry insiders for help. The mission is to stop China's dumping spree, push for stronger local production and close the gaping supply chain hole exposed during COVID.
The Department of Pharmaceuticals is now asking – can India stand on its own chemical legs and can it stop the bleed from Beijing's pricing games? The pressure is on.
China still supplies around 70% of India's API imports. India imports about 50% of its total bulk drug needs. That is the strategic choke point the PLI is aiming to break. The scheme covers the production period from FY23 to FY29. But the impact is already being felt.
Jatish Sheth, secretary general of the Confederation of Indian Pharmaceutical Industry, sees this as China's last stand. 'It is an expected move from the Chinese exporters to bring down the bulk drugs prices. While their focus is to retain the market share, we believe that this is a temporary phenomenon. We do not expect the Chinese players to keep selling the drugs at such low prices for too long.'
He is betting on patience. Indian drugmakers are playing the long game. With new infrastructure, newer molecules and tighter government support, the tide could soon turn.
But for now, it is a staring contest across lab benches and import docks. On one side, old Chinese dominance. On the other, rising Indian ambition backed by billions.
And in between? A market worth tens of billions and the chemical backbone of the world's pharmacy.