New Delhi: India plans to introduce a voluntary code of conduct for precursor chemicals—essential raw materials for legal medicines and industrial goods—to prevent their diversion from legitimate uses to illicit drug manufacturing, two officials aware of the matter said, citing official documents.
The framework, being developed by the Narcotics Control Bureau (NCB) under the home affairs ministry in consultation with the Indian Drug Manufacturers Association (IDMA), covers chemical producers, pharmaceutical firms, logistics providers, exporters, and regulatory bodies.
The dual-use nature of precursor chemicals makes them vulnerable to diversion by illicit drug networks. The proposed code seeks to plug this vulnerability by placing the onus on companies and other supply-chain participants to track shipments, verify buyers, audit inventories, and flag suspicious transactions, while the government seeks tighter controls without imposing new statutory compliance requirements.
The framework covers scheduled and non-scheduled dual-use precursor chemicals, including hydrochloric acid, acetone, pseudoephedrine, sodium hydroxide, methylene chloride, ethanol, toluene, red phosphorus, and ethyl acetate.
"Effective precursor control cannot rely on enforcement alone. Industry, trade, transporters, warehouse operators, importers, exporters, and end-users constitute the first line of defence against diversion," the NCB document stated.
The objective is not to impose additional compliance burdens on legitimate businesses, but to build a collaborative framework that balances security with ease of doing business, one of the officials cited above said.
Queries sent to spokespersons for the health and family welfare ministry, NCB, and IDMA on 1 August remained unanswered till press time.
Voluntary steps
Industry executives said pharmaceutical manufacturers already maintain strict documentation protocols for regulatory compliance and pharmacovigilance or drug safety.
Hari Kiran Chereddi, managing director and chief executive officer at HRV Pharma, based in Hyderabad, said the industry is prepared for the voluntary measures.
“The pharmaceutical industry has long faced challenges due to the lack of oversight. The same chemicals used to make legal medicines can be misused to manufacture illegal drugs,” Chereddi said. ”A voluntary code that includes tracking shipments, inventory checks to verify buyers, and reporting suspicious activity is a welcome step. Most manufacturers already maintain these records for regulators."
Standardized reporting formats will be critical to implementation, Chereddi said. "The key to making this work is coordination. NCB and IDMA must agree on reporting data in formats that match what companies currently use, so compliance does not become additional work. When done right, it strengthens trust in the pharma supply chain without adding unnecessary documentation burdens," he said.
Under the framework, companies would be encouraged to strengthen structural internal controls, including appointing a dedicated compliance officer for precursor vigilance. The guidelines also recommend robust know-your-customer (KYC) procedures, end-use verification and periodic internal audits.
For production oversight, facilities are advised to maintain daily stock logs and calculate input-output ratios to identify yield discrepancies. "By comparing recorded production against these expected ratios, entities can analyze whether any diversion has occurred. Records maintained under this framework should be retained for a minimum period of five years," the document stated.
An IDMA official, speaking on condition of anonymity, said a voluntary model was more practical for chemicals that have widespread legitimate industrial uses. “Mandatory accounting for ubiquitous industrial chemicals like hydrochloric acid is practically unfeasible across thousands of end-users. The voluntary framework aims to build supply chain traceability, enhance regulatory clarity, and proactively prevent India from emerging as a hub for narcotics synthesis," the official said.
The policy push comes amid rising seizures of diverted pharmaceutical products. Seizures of pharmaceutical tablets used as psychotropic substances increased from 18.4 million units in 2023 to 46.9 million units in 2024, according to NCB and home affairs data released in early 2025.
Overall, drug-enforcement activity has also expanded. Press Information Bureau (PIB) latest data shows law-enforcement agencies seized illicit narcotics valued at approximately ₹25,330 crore in 2024 compared with ₹16,100 crore seized in 2023.