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Chinese raw materials stuck at customs: Government tells pharma companies it will clear stocks

Imported raw materials such as intermediates and active pharmaceutical ingredients (APIs) from China are integral components in India's drug supply chain.

July 01, 2020 / 06:15 PM IST

The Department of Pharmaceuticals (DoP) on June 30 assured pharmaceutical industry executives about taking up the matter related to Chinese pharma raw materials and medical supply shipments getting stuck at customs at various ports due to the latest standoff between Indian and China at Line of Actual Control (LAC) in Ladakh.

"The clearance of the stocks by customs has begun, and would take about four days for the whole thing to be cleared," said Dinesh Dua, Chairman of Pharmaceuticals Export Promotion Council (Pharmexcil) – the agency under Department of Commerce for promotion of pharmaceutical exports and CEO of Nectar Lifesciences.

Dua said Pharmexcil has been in touch with the Ministry of Finance, and other departments and apprised the situation arising out of the stocks getting stuck at ports.

India and China have witnessed a dip in their bilateral ties, including trade relations, following death of 20 Indian soliders in a clash with Chinese People's Liberation Army at LAC in Galwan, Ladakh.

On June 29, India banned 59 mobile apps of Chinese companies citing threat to country's "sovereignty and security".

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But industry experts said it is not easy to replicate such bans on other areas such as pharmaceuticals. Imported raw materials such as intermediates and active pharmaceutical ingredients (APIs) from China are integral components in India's drug supply chain.

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In FY19, India imported about $4.5 billion worth of drug raw materials from China. This equates to about 70-80 percent of our requirement. For drugs like penicillins, hormonal pills and essential vitamins, among others, India completely relies on China. Much of our medical devices such as ventilators, thermometers, BP monitors, stethoscopes, pulse-oximeters so are made in China.

Mahesh Doshi, National President of Indian Drugs Manufacturers Association (IDMA) told Moneycontrol that it will take years for the industry to be self-sufficient on APIs and intermediates, until then we will have to rely on Chinese raw materials. He believes that Indian government understands this.

Indian pharmaceutical companies warned that delay in clearance of their stocks could lead to shortages of medicines at time when India is fighting COVID-19 pandemic.

For instance it was reported that imports from pharmaceutical major Mylan, containing raw materials for antiviral drugs Remdesivir and Favipiravir used for treating COVID-19 patients, have been stalled at Mumbai air cargo for five days.

"We have all (pharma companies) suffered, when Wuhan and Hubei province was shutdown due to Coronavirus outbreak, hitting supply of raw materials," said Yugal Sikri, Managing Director, RPG Life Sciences.

Wuhan - the epicentre of the novel Coronavirus outbreak is located in Hubei province, a major pharmaceutical manufacuturing hub in China.

"Some companies who may have a buffer of 2-3 months inventory of intermediates and APIs may manage the situation, but most others it is concerning," Sikri said.

"India is majorly dependent on China for critical care and high-quality medical equipment along with COVID supply. A lot of COVID and non-covid essential equipment come from China for the Indian market," said Vivek Tiwari, co-founder and CEO of Medikabazaar, India's largest business-to-business (B2B) online marketplace for medical devices.

"The masks like N95 and KN95 get imported from China along with lifesaving equipment like ventilators and since shipments from China are laying at ports due to delay in clearances and medical supplies imports are getting affected by the same. The non-availability of resources when the country is aggressively forming policies to fight the pandemic, will act as a deterrent in the fight against COVID-19," Tiwari added.

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Viswanath Pilla
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Jun 30, 2020 10:10 pm