The Impact of Coronavirus on the Indian Pharmaceutical Companies

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India is increasing its presence in global pharmaceuticals. Currently, it is the largest provider of generic medicines. It  globally occupies a 20% share in global supply by volume. It also supplies 62% of global demand for vaccines. India ranks 3rd worldwide for production by volume and 10th by value. The country is home to more than 3,000 pharma companies. It also has a strong network of over 10,500 manufacturing facilities. The domestic pharmaceuticals market turnover reached US$ 20.03 bn in 2019.

India as a Source of Generic brands 

India is the source of 60,000 generic brands across 60 therapeutic categories.  It manufactures more than 500 different Active Pharmaceutical Ingredients. The Department of Pharmaceuticals aims to make the country a hub for end to end drug discovery. To do so it has laid its ‘Pharma Vision 2020’. The government has targeted to spend 2.5% of its GDP on healthcare by 2025.

India supplies affordable and low-cost generic drugs to people around the globe. Its active pharmaceutical ingredients(API) market estimates $6 billion by end of 2020.

Indian Pharmaceutical Industry 

The Indian pharmaceutical industry is the source of APIs. It is a crucial part of the pharma industry’s strategic plan to combat the COVID-19 pandemic. The majority of APIs for generic drug manufacturing across the globe come from India. India supplies approximately 30 percent of the generic APIs used in the US.  Indian manufacturers rely on APIs from China for the production of their medicine.

China’s role

China is the top global producer and exporter of APIs by volume. The coronavirus increased the dependency of the Indian pharma sector on China for its API procurement. The product exportation restrictions from India created shortages in manufacturing plants in China. Supplies were further affected by the disruption of logistic. Like transportation systems, restricting access and movement of products to and from ports.

Earlier India only imported 0.3% of APIs from China. Globalisation of Indian companies and large scale manufacturing led to increase in imports. The primary driver being the low cost of production.

India’s tension with China

The current dependency of Indian companies on Chinese APIs concern national health security. The tensions between India and China has led the government to reduce its API intake. The Indian government to set up a taskforce to review the internal API sector. Any disruption in the supply chain of APIs from China can lead to major shortage in the production. These productions include the medicines for very basic diseases. For example, cardiovascular diseases, diabetes, tuberculosis etc. 

India and the Indian Government 

HDFC Securities says Indian pharma has been relative resilient to the Covid disruption.  India is likely to gain from favourable currency growth. It can also lead to stability for India and US business. 

The Indian government can promote domestic API manufacturing in various ways. The government decided to maunfacture APIs and key starting material on its own. Indian drugs will help in the creating a self independent pharmaceutical sector. India is capable to manufacture all APIs.


The investment in creating bulk drug parks is an important step for the development of the industry. India is the pharmacy of the world and contributes 20% to the global generics market. According to the government, every third tablet sold in the US is from India. China has gained importance in APIs like antibiotics and vitamins.

The Cabinet approved schemes that will promote drug parks with  investment of Rs 3,000 crore . It will also create a production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical KSMs/Drug Intermediates and APIs. These policies of the government will promote the API industry to a another extent. is now on Telegram. Follow us for regular legal updates and judgements from the court. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can also subscribe for our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.


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