India’s Chemical Industry: A Comparative View and Recommended Improvements
Despite being renowned for its massive pharmaceutical industry, the Indian chemical sector faces significant barriers to competing effectively with other major players like China. This report, prompted by the Technology Information Forecasting and Assessment Council (TIFAC), an autonomous organisation and think-tank under the Department of Science and Technology, outlines these shortcomings.
Indian Chemical Industry Challenges
One of the main difficulties highlighted by TIFAC is the lack of advanced technology, plants, and infrastructure necessary for cost-effective and environmentally friendly manufacturing of key chemicals. This deficiency has led to a significant decline in the production of several Active Pharmaceutical Ingredients (APIs), notably ascorbic acid, aspartame, and antibiotics like doxycycline, rifampicin, tazobactam acid, and steroids. Other intermediates such as atorvastatin, chloroquine, gabapentin, ciprofloxacin, cephalosporins, immunosuppressants have also been abandoned.
Dependency on Imports
The Indian chemical industry heavily relies on imports from China, accounting for 67% of chemical intermediates and APIs used in drug manufacture and export. The USA and Italy are other significant exporters of APIs to India. Furthermore, drugs like chloroquine and hydroxychloroquine (HCQ), essential for treating autoimmune diseases like rheumatoid arthritis and recommended by the Indian Council of Medical Research (ICMR) for Covid-19 treatment, are primarily imported from China.
Uncompetitive Manufacturing Costs
The high costs involved in manufacturing solvents and chemicals present another hurdle for India. Production expenses in India are more than 15% higher than in China, making it challenging for Indian manufacturers to compete on price. Consequently, the proportion of Indian bulk drugs and intermediates has dwindled to 20% in 2018 from 42% in 2008 in total pharmaceutical exports.
Understanding APIs and Pharmaceutical Intermediates
APIs, also known as bulk drugs, are pivotal ingredients used in drug production. China’s Hubei province is a renowned hub for the API industry. On the other hand, Pharmaceutical Intermediates are by-products created during API production and form the foundation of APIs.
Proposed Measures for Improvement
To overcome these challenges, TIFAC proposes mission-mode chemical engineering with clearly defined targets for uninterrupted synthesis of API molecules. This initiative could include creating large-scale drug manufacturing clusters with common infrastructure in India and developing a technology platform for biocatalysis, a process that uses natural substances from biological sources to fast-track chemical reactions for cost optimization.
Government Role in Strengthening the Chemical Industry
For this proposed transition to be successful, the government needs to encourage and support Indian companies working in chemical segments. Effective implementation of TIFAC’s recommendations can potentially enable India to achieve ‘Atmanirbhar’ or self-reliance in the pharmaceutical sector by lessening import dependency.
The Path Ahead
Schemes similar to the Promotion of Bulk Drug Parks and Production Linked Incentives (PLI) can help curb the high manufacturing costs of bulk drugs and boost domestic production. These initiatives can pave the way towards a more competitive and self-reliant Indian chemical industry.
