India may increase customs duty on import of active pharma ingredients by 10-15%: Report

The Centre is reportedly looking to increase customs duty on imported active pharmaceutical ingredients (APIs) by 10-15 percent, in order to boost local manufacturing of the bulk drugs.

The Department of Pharmaceuticals (DoP), Government of India is considering an import duty of 20-25 percent on APIs, against the current 10 percent, said a report by The Economic Times.

Moneycontrol could not independently verify the report.

At present, 70 percent of India’s API requirement is sourced from China, while for antibiotics in particular, the dependence is over 90 percent. India is the third largest pharma industry globally.

"This will help the Indian pharma industry as they face stiff competition from cheap imports," said an official told the paper. The move was suggested by committee of experts under the DoP.

But experts feel this would be “impractical at present” as we are “not yet self-reliant”. “…increasing the import duty will hit the pharma industry, especially those manufacturing formulations and are dependent on other countries for APIs," as per the report.

The government is working to reduce dependency on API imports and launched an Rs 10,000 crore scheme in July to ensure adequate domestic supply. Besides this, incentives of Rs 10 crore each was announced for Indian companies set ting up plants to produce 53 crucial APIs which we are currently heavily dependent for on China.

“The scheme offers annual incentives of Rs 720 crore for crucial fermentation products such as amino cephalosporanic acid 7-aca (used in manufacturing anti microbial drugs), clavulanic acid (to treat bacterial infectiontions), penicillin g (used to manufacture antibiotics) and erythromycin thio cyanate (anti-infectives),” the official added.