Worsening China-India ties will not bring any immediate disruption in pharmaceutical firms

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There is no immediate disruption to the raw material inventory of the pharmaceutical industry in India due to the delay in clearance of Chinese shipments at various ports as a large inventory is already kept as a contingency following the COVID-19 crisis in China in March. Indian pharmaceutical firms had experienced severe disruption in almost all supplies in March due to the lockdown caused by the virus in China. About two-thirds of the pharmaceutical ingredients are imported by Indian pharmaceutical firms from China. Many companies used to keep larger inventory quantities than needed as safety if there was any supply disruption from China, which has now helped them out.

Many pharmaceutical companies have at least two or three months of inventory in-store, while larger companies have as much inventory for four months of production which has helped them in continuing production in this situation. Bulk Drugs Manufacturer’s Association president V.V. Krishna Reddy said that if the clearance of shipment is started now and completed in the next week, then there wouldn’t be much of an impact. After pleas by the pharmaceutical industry the customs department informed it will start clearing the shipments of Active Pharmaceutical Ingredients (APIs) imported from China which are stuck at various ports across India.

Since June 22nd, customs officials had held up shipments of APIs and other materials, which originated from China at various ports of the country. The border dispute and the subsequent tension in the relationships between China and India was the reason for holding up shipments. Indian Drug Manufacturer’s Association Director General, Daara B. Patel said that apparently, there were rumors 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.

Dinesh Dua, chairman of the Pharmaceutical Export Promotion Council of India (Pharmexcil), said that the total value of shipments amounts to ₹200 crores, and that about two-thirds of those are at seaports and dry ports. Bulk drugs and intermediates worth $2.4 billion were imported by Indian firms in 2018-19, the majority of it was from China, the other sources were US, Italy, Hong Kong, and Singapore. China mainly supplies Indian firms with fermentation-based APIs used in antibiotics like tetracycline and erythromycin, and pravastatin a cardiovascular drug, as well as paracetamol and certain vitamins.

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