CII wants Infrastructure Status for Bulk Drug Industry
India needs to overcome challenges around land acquisition, ease of doing business, environmental clearances, taxation, and R&D need to be resolved for India to become a global active pharmaceutical ingredient (API), according to G V Prasad, Chairman, CII National Committee on Pharmaceuticals.
CII further has recommended that the government support on capital intensive fermentation-based API industry and dedicated clusters, said Prasad who is also Co-Chairman and Managing Director Dr. Reddy’s Laboratory Limited.
The recommendation calls for a single window clearance system for establishing an API manufacturing unit and further product development, priority environmental clearances for APIs with definite timeline, soft loans with long repayment periods, 20-25% incentives on API Manufacturing. These are imperative, he added.
As a short and mid-term measure, CII also calls for “infrastructure status” to the bulk drug industry.
It wants common minimum infrastructure facilities in the form of 4-5 integrated large-scale clusters to manufacture critical APIs/Intermediates and key starting material (KSMs) to achieve economies of scale.
The recommendation calls for reinstating weighted tax deductions of 200% on expenditure on R&D which, in-turn, will help boost innovation in the country.
These recommendations were made as CII, in partnership with KPMG, released the report titled “Indian API Industry- Reaching the Full Potential”.
The study laid down pillars required to make India a manufacturing hub for APIs and making the nation self-sufficient.
As long-term strategy, the report recommends increased collaboration between industry and academia, subsidies and incentives for technology modernization and adoption of green technology.
Over the past two decades, India’s reliance has grown for imports of low-cost intermediates and APIs. Over-dependence on imports has increased the threat to the nation’s health security.
The COVID-19 crisis has brought forth the need for India to have its own strengths and supplies of API for its robust pharma sector.
The Government’s recently approved package of Rs.9,940 crore shall boost the domestic production of bulk drugs and exports.
The report provides an in-depth analysis of overall cost of API production in China, which is 20-30% lower than in India.
It also compares inter industry incentivization schemes and models including sectors like automobile, electronics, biotechnology, textile and IT/ITeS.
The report, released 17 Apr 2020, will be useful in drafting fine print and models of incentivization for recently announced scheme by Department of Pharmaceuticals.
The report articulates strengths of the Indian API industry along with key challenges of low fermentation capacity, high cost of utilities such as electricity, steam, water, brine, heating, ventilation and air conditioning, limited funding for R&D in the bulk drug industry and technology upgradation and absence of large scale API clusters. fiinews.com
