Indian API Industry: Make in India & PLI to Limit China Imports

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The Indian active pharmaceutical ingredient (API) industry believes that the Make in India initiative and the PLI (production-linked incentive) scheme will help limit imports from China.

According to Rakesh Reddy, managing director of Aparna Pharmaceuticals, the implementation of the PLI scheme, coupled with a strategic industry perspective aimed at decreasing reliance on China, is motivating Indian API companies to localize the production of intermediates and KSMs (key starting materials) while enhancing their competitive edge in the foreseeable future. Overall, this scheme encourages innovation and collaboration.

The current landscape of the Indian API market is characterized by a significant degree of fragmentation. He added that numerous manufacturers are diligently working towards broadening their market presence by implementing diverse business tactics, including alliances, facility enhancements, and regulatory approvals.

He noted that to bolster the domestic market through its Make In India appeal, the government introduced initiatives aimed at boosting the domestic manufacturing of APIs and other critical drugs, which have since favorably impacted market expansion.

To this end, the government has allocated over Rs. 20,000 crore, and a key component of the Budget 2024 too was the provision of PLI to companies that commit to investing in the domestic manufacturing of crucial KSMs necessary to produce APIs used in medications for diabetes, tuberculosis, steroids, and antibiotics. 

The projected size of the Indian API market stands at over US$ 13.5 billion in 2024, with an expected growth of over US$ 20 billion by 2029. This represents a compound annual growth rate of 8.3% over the forecast 5-year period.