Protecting Domestic Pharma Industry

In response to global trade disruptions caused by geopolitics, the government is considering the imposition of a minimum import price (MIP) on essential pharmaceutical raw materials. This initiative is designed to safeguard the domestic pharmaceutical sector from the influx of cheap Chinese imports, which local manufacturers argue are detrimental to their operations.

Strategic Raw Materials Under Consideration

The proposed MIP could apply to approximately 10 critical raw materials, including those used in antibiotics and anti-cholesterol therapies, predominantly imported from China. These materials are part of the 41 components identified under the government's Product-linked Incentive (PLI) scheme, aimed at enhancing domestic manufacturing and reducing reliance on imports.

Industry Concerns and Government Response

While the move is seen as a protective measure for local manufacturers, it has sparked debate among finished formulation producers. Concerns have been raised about the potential increase in production costs due to higher prices for raw materials and intermediates. The government, however, views this as a necessary step to stabilize the domestic manufacturing sector, similar to protections offered under the PLI scheme for mobile handsets.

Last year, the government implemented an MIP on soda ash, marking one of the first such measures in years. This precedent underscores the government's commitment to securing supply chains and supporting local industries.