India’s Pharma Supply Chain Heavily Reliant on Chinese Imports: NITI Aayog
A new NITI Aayog report highlights India's 65% reliance on Chinese imports for critical pharmaceutical ingredients. To address this, the government is urging a move toward higher-value manufacturing and improved industry-academia collaboration to secure the nation's position as a global pharmacy leader.
Highlights
- •The NITI Aayog report states that 65% of India's pharma supply chain relies on Chinese imports for APIs and KSMs.
- •Increased environmental compliance costs are currently impacting manufacturing and R&D activities within the domestic industry.
- •The report calls for improved industry-academia technology transfer to boost patent commercialization and startup innovation.
- •India remains a major global player, supplying significant volumes of generic medicines to the US, UK, and Africa.
A recent report from the NITI Aayog has highlighted a significant concern regarding the vulnerability of the national pharmaceutical sector. According to the eighth edition of the Trade Watch Quarterly, the country's pharma supply chain remains heavily dependent on Chinese imports. Specifically, about 65 percent of the critical Active Pharmaceutical Ingredients (APIs), Key Starting Materials (KSMs), and various intermediates—particularly those related to fermentation-based products—are sourced from China.
Addressing Structural Challenges in the Pharma Supply Chain
The report underscores that rising environmental compliance standards have contributed to higher manufacturing and research and development costs within the domestic industry. Furthermore, the analysis points toward a relatively weak innovation and commercialization ecosystem, which creates considerable uncertainty for long-term investments and local innovators. To mitigate these risks, the NITI Aayog advocates for a strategic shift toward high-value pharmaceutical segments to reduce reliance on external suppliers.
The study also emphasizes the necessity of enhancing regulatory transparency and fostering stronger collaboration between industry players and academia. By strengthening technology transfer within life-sciences clusters, the sector could significantly accelerate patent commercialization, improve research partnerships, and provide better support for startup incubation. These initiatives are deemed essential to maintaining the country's status as a key global supplier of medicines.
Global Standing and Future Potential
Ashok Kumar Lahiri, the Vice Chairman of NITI Aayog, noted that while the nation is widely recognized as the pharmacy of the world due to its high-volume production, there is a clear imperative to move up the value chain. He expressed confidence that if domestic firms focus on producing high-quality and competitively priced branded products, they could secure a much larger footprint in the international market.
Currently, the country plays a vital role in global health, meeting approximately 50 percent of the generic drug requirements for Africa, 40 percent for the United States, and 25 percent for the United Kingdom. With the global pharmaceutical market demand reaching a valuation of USD 1.3 trillion in 2025—comprised of USD 1.02 trillion for pharmaceuticals and USD 261 billion for APIs—the potential for growth is immense. In the fourth quarter of the 2026 fiscal year, national trade expanded by 5.4 percent, totaling USD 1.84 trillion, despite fluctuations in merchandise exports and imports. Strengthening the pharma supply chain through local production and innovation remains a top priority to ensure long-term stability and continued success on the global stage.
