Imports of bulk drugs and drug intermediates into India have experienced a notable 12% decline in the first three quarters of the fiscal year 2023-24, despite a marginal 1% growth in quantity. The data provided by the Directorate General of Commercial Intelligence and Statistics (DGCIS) reveals that, from April to December 2023, the imports totalled approximately 2.95 lakh metric tonnes, valued at $3 billion. In comparison, the same period in the previous fiscal year recorded 2.92 lakh metric tonnes, valued at $3.41 billion.

Importantly, imports from China exhibited a more significant decline of 9.45% during this period, reflecting the country's reduced contribution to the Indian pharmaceutical supply chain. The value of imports from China dropped to $2.15 billion, down from $2.38 billion in the corresponding nine months of the previous fiscal year. However, in terms of quantity, there was a 4% increase, reaching 2.24 lakh metric tonnes compared to 2.15 lakh metric tonnes in the April-December 2022 period.

For the quarter spanning October to December 2023, bulk drugs and intermediates imports reported a substantial 33.3% decline at $770.96 million, in contrast to the $1.16 billion recorded in the same period of the preceding year. Quantity-wise, there was a corresponding drop of around 32%, with imports totalling 69,170 metric tonnes compared to 1.01 lakh metric tonnes during the same quarter in the previous fiscal year.

Imports from China during the last quarter of 2023 declined by approximately 30.4% to $550.32 million, down from $790.35 million in the October to December 2022 period. Quantity-wise, imports decreased from 77,915 metric tonnes to 51,126 metric tonnes during the comparable period.

The Indian government has been actively working to reduce dependence on bulk drug imports, particularly from China. Initiatives such as the production-linked incentive (PLI) scheme aim to promote domestic manufacturing of critical key starting materials (KSMs), drug intermediates, and active pharmaceutical ingredients (APIs). Additionally, support for bulk drug parks in Gujarat, Himachal Pradesh, and Andhra Pradesh, with a financial outlay of Rs. 3,000 crore underscores the commitment to fostering domestic production through common infrastructure facilities.

The completion of projects under the PLI scheme is anticipated to positively impact the industry's reliance on Chinese imports. By the end of FY24, the dependency on Chinese imports is projected to decrease to 69%, with a further reduction to around 65% as major projects become operational in the fourth quarter of FY24, and additional projects commence in FY25.

Despite these positive developments, the overall dependency on Chinese imports is expected to remain relatively high. The growth projections for the Indian pharma industry during FY24 and FY25, estimated at 7%-9%, will drive incremental requirements for APIs. Enhanced capacity additions under the PLI schemes are anticipated to meet these requirements, but the overall import dependency is likely to persist.