The government’s decision to incentivise manufacturing of active pharmaceutical ingredients (APIs) and key starting materials (KSMs) for drugs under Make in India will work well in the creation of a self-sufficient healthcare ecosystem in the country, and reduce dependence on imports, say experts in the field.

“India has the capability and competence to manufacture all APIs. The announcement by the Government will help revive the API industry in the country and will help the sector regain the dominance that was lost over the years. The investment in creating bulk drug parks is an important step in the right direction for the development of the industry,” said Satish Reddy, IPA president, and chairman, Dr Reddy’s Laboratories, in a statement.

India is the pharmacy of the world and contributes 20% to the global generics market. As per government estimates, every third tablet sold in the US is from India.

However, the industry is dependent on China for many APIs and KSMs, which go into the manufacturing of formulations.

“China has gained importance in fermentation based APIs namely, antibiotics and vitamins. The government policy to encourage fermentation based industry will help build self-reliance”, said Pankaj Patel, chairman, Zydus Cadila.

With the positive numbers of coronavirus disease (Covid-19) increasing in the country, the Indian Pharmaceutical Alliance (IPA) and its member companies are working in an integrated manner with the government, other Indian pharmaceutical industry associations and key stakeholders in the pharmaceutical supply chain, to ensure that patients in India continue to have access to affordable, quality medicines.

The IPA represents 24 research based national pharmaceutical companies. Collectively, IPA companies account for at least 85% of the private sector investment in pharmaceutical research and development.

They contribute at least 80% of the country’s exports of drugs and pharmaceuticals and service over 57% of the domestic market.

The Cabinet in its decision on Friday approved schemes that will promote bulk drug parks for financing common infrastructure facilities in three bulk drug parks with financial investment of Rs 3,000 crore in the next five years; and secondly will create a production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical KSMs/Drug Intermediates and APIs in the country with financial implications of Rs 6,940 crore for the next eight years.

“The new policy is a bold announcement by the government and will give the necessary fillip to the API industry in India... this will safeguard healthcare security and create ecosystem for strong Indian API industry,” said Dilip Shanghvi, managing director, Sun Pharma.