India's government has threatened to place restrictions on imports of nonessential items, including pharmaceuticals, from China if it does not ease some of its "protectionist tendencies" toward Indian products.
India trade officials said the warning was issued in advance of an upcoming China visit by Prime Minister Narendra Modi in which he is expected to raise market-access issues and Chinese investment in India as major trade issues.
The threat, according to officials, was that India would set quality standards for certain imported products and services and apply them strictly to China goods.
In the drug area, one official said, China essentially limits India generics exports by requiring state-run hospitals to sell two branded versions of a drug for every generic they sell. That regulation is keeping India pharmas from getting a foothold in China, the official at the Commerce Ministry said.
India relies on China-made active pharmaceutical ingredients (APIs) for at least two-thirds of its needs, but China's trade and nontrade barriers have prevented a more balanced trade regardless of several memoranda of understanding the two nations have signed, the official told the Indian Express.
In what's left of this month, India's government is expected to announce a new policy aimed at helping the pharmaceutical industry become a major producer of its own basic needs. Bulk drugs and active pharmaceutical ingredients are at the center of concerns that the nation is too reliant on China and other foreign sources for those key elements.
But insiders in several related government agencies, nongovernment organizations and industry revealed in a series of interviews with the Financial Express say the solution is a long way away and the industry is going to need a lot of help from the government.
The head of the Department of Pharmaceuticals, citing the initiative to reverse the decline in India's ability to produce its own basic chemical products that go into the medicines it produces, said the nation has an "urgent need" to be self-sufficient, particularly in APIs.
India has long been concerned that it relies on China for nearly all its APIs, a potentially hazardous position for any industry to be in. One expert said India could out-produce China in that area, but the companies that would do the work would need government industry-friendly policies, support and collaboration to rebuild that segment of the industry. He noted that India had more than 600 API makers a few years ago and only about 250 now.
That industry segment has declined, some of those interviewed said, because of conditions not directly related to drug making, such as the cost of money, land, utility and services, all elements of the requisite infrastructure involved in making an industry competitive.
Some of the experts worried the solution to the challenges the industry faces in becoming self-reliant on bulk drugs and APIs and more of an exporter than importer of them is far off, despite government concerns and the new government's focus on having the nation produce its own goods.