BackNo immediate disruption seen by pharma firms from worsening Sino-Indian ties
Pharma companies have been lately keeping bigger inventories to avoid another lockdown-like disruption
PremiumNEW DELHI: The pharmaceutical industry does not see an immediate disruption to its raw material inventory from the delay in clearance of Chinese shipments at various ports as it already has a large inventory as a contingency following the covid-19 crisis in China in March.
Indian pharmaceutical firms, which import about two-thirds of their active pharmaceutical ingredients from China, had seen a severe disruption in almost all supplies in March due to the virus-induced lockdown in the neighbouring country.
The disruption in March became a lesson for most companies, who then kept larger-han-usual inventories to offset any disruption of supply from China, an official with one of India’s largest drug manufacturers told Mint, on condition of anonymity.
Currently, most pharmaceutical companies have at least two or three months of inventory, with larger players having as much as four months’ inventory for certain APIs, the official said.
“If they start clearing right now and it is done in the next one week, I don’t think there would be much of an impact," Bulk Drugs Manufacturers’ Association President V.V. Krishna Reddy said.
Earlier this week, the customs department informed the industry that it will start clearing shipments of active pharmaceutical ingredients (APIs) imported from China stuck at ports across India as the government relented after pleas by the pharmaceutical industry.
Customs officials had held up shipments of APIs and other materials, which originated from China at various ports of the country since 22 June. Holding up of shipments came amid a border dispute between China and India and the subsequent tension in the relationships.
“Apparently, there were rumours that the Chinese were trying to push some spurious materials or narcotics along with the shipments, so it seems the Indian authorities seemed to have become more vigilant," Indian Drug Manufacturers’ Association director general Daara B. Patel said.
Unlike Reddy, Patel expects that if all the shipments are not cleared from the ports to the manufacturers by next week, there could be a cascading effect in production of medicine formulations and this could potentially affect the drug supply over the coming weeks.
However, Patel expects the situation to normalise as early as Monday.
Dinesh Dua, chairman of Pharmaceutical Export Promotion Council of India (Pharmexcil), had earlier this week said that the total value of shipments is around ₹200 crore, and that about two-thirds of those are at seaports and dry ports where the disruption has been more severe.
Indian firms imported bulk drugs and intermediates worth $2.4 billion in 2018-19, majority of it from China, with the other sources being US, Italy, Singapore and Hong Kong.
Indian firms depend most on China for fermentation-based APIs used in antibiotics such as tetracycline and erythromycin, and cardiovascular drugs such as pravastatin, as well as certain vitamins and paracetamol.
In March, owing to lockdown, the disruption was so dire that the Indian government curbed the export of 13 active pharmaceutical ingredients (APIs) and their formulations, including paracetamol, vitamins B1, B6 and B12, progesterone and erythromycin.
The restrictions were lifted for these ingredients by the Directorate General for Foreign Trade in April as the situation in China eased. The diplomatic tensions between India and China has now become the second disruption in less than four months.
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