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Amid rising geopolitical tensions, Indian pharma calls for strategic overhaul of supply chain
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Nandita Vijayasimha, Bengaluru
January 19 , 2026
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Amid rising geopolitical tensions and evolving global trade policies, Indian pharma industry is calling for a strategic overhaul of supply chains. Current global trade conditions expose the vulnerabilities of existing sourcing strategies and reinforce the need for a resilient, diversified, and secure supply of critical medicines and active pharmaceutical ingredients (APIs).
This is the only way to break the dependency and Indian pharma needs to chalk out its roadmap for API self-reliance. As the Pharmacy of the World, India supplies about 20% of all generic drugs prescribed globally. However, there is a catch. India is overwhelmingly dependent on imported APIs. Almost 65-70% of all required APIs are imported, with the reliance reaching up to 90% in the case of certain antibiotics and cardiovascular medicines, said Dr. Purav Gandhi, CEO and founder, Healthark.
Taking cognizance of this over-reliance on imports and the recent geopolitical tensions that threaten to disrupt supply chains, India has chalked out an ambitious path to achieve self-reliance or ‘Atma-nirbharta’in the pharma sector. This imbalance was best laid bare during the initial phase of the Covid-19 pandemic, when the supply chain disruptions from China threatened to stall India’s pharma production lines, he added.
Realizing this imbalance and the inherent risks, the Union government pivoted from passive to active intervention with the production linked incentives (PLIs) for the promotion of domestic manufacturing of critical key starting materials (KSMs)/drug intermediates (DIs) and APIs, said Dr Gandhi.
In fact, the government was effectively de-risking capital expenditure for companies who previously found domestic manufacturing economically unviable compared to cheaper Chinese imports. While the government tries to set a direction, the road ahead is still full of challenges, the starkest amongst these being the cost differential, he said.
Chinese manufacturers benefit from economies-of-scale, state subsidies on utilities, and large-scale capacities. Though Indian manufacturers also receive subsidies and other benefits, it may take time for the cost to come down meaningfully, Dr Gandhi told Pharmabiz.
Besides, API manufacturing is inherently capital-intensive and environmentally sensitive. Some of the previous orders of the National Green Tribunal (NGT) have led to the closure of several pharma manufacturing units due to heavy volume pollutants released by them. Rebuilding this capacity requires not only financial investment but also the development of sustainable, green chemistry technologies that can compete globally without environmental degradation. The development of three Mega Bulk Drug Parks in Himachal Pradesh, Gujarat, and Andhra Pradesh with common infrastructure facilities like solvent recovery and waste management plants, is a crucial step in addressing these infrastructure gaps, he said.
Several companies have set up facilities under the PLI umbrella. If this momentum is sustained, India will be in line to reduce its API import dependence by 25-30% over the next five years. The roadmap to self-reliance is not about total isolation but about strategic autonomy. By diversifying supply chains and building domestic capacity for critical molecules, India is securing its position not just as a finisher of drugs, but as a holistic pharmaceutical power. The transition from import dependency to self-sufficiency will be gradual, but the structural reforms initiated are essential, said Dr Gandhi.
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