21.1 C
Delhi
Friday, November 27, 2020

India’s incentives for API production may cut supply risk: Fitch

- Advertisement -

India's GDP growth is still solid against that of peers: FitchNew Delhi (IANS) The government’s decision to incentivise domestic manufacturing of active pharmaceutical ingredients (API) and key starting materials (KSM) could curtail supply-chain disruption risk for Indian drug makers, Fitch Ratings said on Monday.

The ratings agency said that the incentives address core issues of pricing competitiveness and funding and may assist the investment decisions of local pharma companies in the current environment.

“India is one of the world’s leading suppliers of drugs – mostly generic formulations – but depends on imports for its requirement of APIs and KSMs, particularly China, which accounted for more than 60 per cent of requirements in some therapy areas,” Fitch Ratings said in a statement.

“The government announcements follow recent developments, including plant closures in China due to the coronavirus pandemic earlier in the year and the more recent border standoff with China, which underscore supply-disruption risk due to overdependence on imports.”

READ ALSO:  Over 29 lakh aviation jobs in India may be hit in 2020: IATA

As per the statement, India’s reliance on pharma ingredient imports has risen over the past few decades due to the higher cost of domestic production, with the price gap reaching as much as 20-30 per cent, particularly for energy-intensive fermentation-based ingredients used in anti-infectives.

Import dependence is more than 90 per cent for some life-saving drugs, including penicillin and ciprofloxacin.

“We believe the government announcement, which includes production-linked incentives and financial assistance schemes aggregating to $1.3 billion, will help address the two keys issues; the higher cost of domestic production compared with imports and funding requirement to set up the necessary infrastructure,” the statement said.

“The production-linked incentive scheme – which accounts for Rs 0.9 billion of planned outlay – offers an incentive of up to 20 per cent of sales for fermentation-based products and up to 10 per cent for chemical synthesis-based products for the next eight to nine years. This should help to bridge the price gap and make domestic production more competitive.”

READ ALSO:  Google-enabled app helping small farmers in India

The government has also allocated $0.4 billion under the capex assistance scheme to fund up to 90 per cent of the investment need to build common infrastructure facilities in three bulk drug parks.

“We believe this will aid the investment decisions of Indian pharma companies, particularly in the current environment where the focus in on conserving cash,” the statement said.

“While these incentives aim to encourage incremental investment to ensure uninterrupted supplies for domestic needs, companies with existing API production capabilities… could benefit from export opportunities over the medium- to long-term as pharma companies globally look to diversify their sourcing – a theme that has gained relevance due to the pandemic.”

–IANS

India Updates
India Updates is an independent news & Information website. Follow us for regular updates on News and Information.

Follow Us On

Related News

Adamant protesting farmers resume journey towards Delhi

Chandigarh, Nov 27 (IANS) Braving chilly night under the open skies, thousands of protesting farmers from Punjab and Haryana gathered in Panipat town, resumed...

After braving tear gas, water cannon, farmers halt in Panipat for night

Chandigarh, Nov 27 (IANS) Tens of thousands of farmers up in arms on Thursday braved tear gas shells and water cannons to break through...

Nivar effect: Met dept puts Bengaluru on Yellow alert for next 2 days

Bengaluru: The India Meteorological Department on Thursday issued a yellow alert in Bengaluru and surrounding districts on November 26 and 27.Cyclone Nivar – the...

Premiums on insurance bought during Oct-Mar eligible under LTC scheme

New Delhi, Nov 26 (IANS) Central government employees can claim reimbursement for premiums paid for insurance policies purchased between October 12, 2020 and March...

Sanjay Dutt’s new film ‘Torbaaz’ discusses terrorism with human angle

Mumbai, Nov 26 (IANS) Filmmaker Girish Malik, who directs Sanjay Dutt in his new film Torbaaz, says he wanted to show a story of...

Excited to be back playing in front of crowds: Kohli

Sydney, Nov 26 (IANS) Rival skippers Virat Kohli of India and Aaron Finch of Australia on Thursday expressed relief and joy at the prospect...

Trending Topics In India

Covid 19 India Updates

Kerala, Maha, Delhi among 6 states with 61% new Covid cases detected every day

By Rajnish Singh, (IANS) Kerala, Maharashtra and Delhi are among top six states which are accountable for contributing 61 per cent new Covid-19 cases on daily basis in India,...

Kerala, Maha, Delhi among 6 states with 61% new Covid cases detected every day

By Rajnish Singh, (IANS) Kerala, Maharashtra and Delhi are among top six states which are accountable for contributing 61 per cent new Covid-19 cases on daily basis in India,...

Looking at vaccine manufacture, delivery ecosystem: Harsh Vardhan

New Delhi, Nov 25 (IANS) At a time the world is racing against time to find a safe and effective vaccine against Covid-19, Union...

Apollo Hospitals gearing up to give one million vaccines a day

New Delhi, Nov 25 (IANS) Apollo Hospitals are gearing up to give one million vaccines a day once it is available across India through...

Over 88% Indians know at least one Covid infected person: Survey

New Delhi, Nov 25 (IANS) With over nine million coronavirus cases in India, 88 per cent citizens now have one or more contacts in...

Covid-19 second wave may be a tsunami, warns Thackeray

Mumbai, Nov 22 (IANS) With Covid-19 cases again surging in some parts of the the country, Maharashtra Chief Minister Uddhav Thackeray on Sunday hinted...

Trending News In India

Excited to be back playing in front of crowds: Kohli

Sydney, Nov 26 (IANS) Rival skippers Virat Kohli of India and Aaron Finch of Australia on Thursday expressed relief and joy at the prospect...

After braving tear gas, water cannon, farmers halt in Panipat for night

Chandigarh, Nov 27 (IANS) Tens of thousands of farmers up in arms on Thursday braved tear gas shells and water cannons to break through...

Nivar effect: Met dept puts Bengaluru on Yellow alert for next 2 days

Bengaluru: The India Meteorological Department on Thursday issued a yellow alert in Bengaluru and surrounding districts on November 26 and 27.Cyclone Nivar – the...

Premiums on insurance bought during Oct-Mar eligible under LTC scheme

New Delhi, Nov 26 (IANS) Central government employees can claim reimbursement for premiums paid for insurance policies purchased between October 12, 2020 and March...

Sanjay Dutt’s new film ‘Torbaaz’ discusses terrorism with human angle

Mumbai, Nov 26 (IANS) Filmmaker Girish Malik, who directs Sanjay Dutt in his new film Torbaaz, says he wanted to show a story of...

Excited to be back playing in front of crowds: Kohli

Sydney, Nov 26 (IANS) Rival skippers Virat Kohli of India and Aaron Finch of Australia on Thursday expressed relief and joy at the prospect...

Trending Showbiz

Sanjay Dutt’s new film ‘Torbaaz’ discusses terrorism with human angle

Mumbai, Nov 26 (IANS) Filmmaker Girish Malik, who directs Sanjay Dutt in his new film Torbaaz, says he wanted to show a story of...

Gear up for India’s first ever OTT awards

By Puja Gupta, (IANS) Fans across the globe now have a chance to engage with OTT entertainment content and stars digitally; they can and...

Malayalam film ‘Jallikattu’ is India’s entry for Oscars 2021

Mumbai, Nov 25 (IANS) The Malayalam film, Jallikattu, has been selected as the official Indian entry in the Best International Feature Film category at...

Kabaddi is a sport, can’t be played well without teamwork: Abhishek Bachchan

Mumbai, Nov 24 (IANS) Abhishek Bachchan, who owns the Kabaddi team Jaipur Pink Panthers, says the upcoming docu-feature, Sons Of The Soil: Jaipur Pink...

Television actor Ashiesh Roy passed away

Mumbai, Nov 24 (IANS) Television actor Ashiesh Roy passed away in Mumbai early on Tuesday. The Sasural Simar Ka actor died of kidney failure...

Arjun Kapoor: Children should never go without adequate food

Mumbai, Nov 23 (IANS) Bollywood actor Arjun Kapoor has opened up about his food start-up venture that has been feeding 1000 children every month....

Trending Sports

Excited to be back playing in front of crowds: Kohli

Sydney, Nov 26 (IANS) Rival skippers Virat Kohli of India and Aaron Finch of Australia on Thursday expressed relief and joy at the prospect...

1986 World Cup quarter-final: Maradona becomes immortal

New Delhi, Nov 26 (IANS) “I dream of being able to score another goal against the English, with the right hand this time!” said Diego...

Football legend Diego Maradona, 60, dead

Buenos Aires, Nov 25 (IANS) Football legend Diego Maradona has died, aged 60, according to Argentine media reports. He had been discharged from hospital...

New ICC chairman Barclay: Rugby’s loss is cricket’s gain

New Delhi, Nov 25 (IANS): Auckland-based lawyer and sports administrator Greg Barclay was on Wednesday announced as new chairman of the International Cricket Council (ICC)....

Sports Ministry recognises archery body again, after eight years

New Delhi, Nov 25 (IANS): The Archery Association of India (AAI) on Wednesday re-gained recognition from the Sports Ministry nearly eight years after it was...

ICC Awards of the Decade: Kohli in fray for 5; five more Indians in race

Dubai, Nov 25 (IANS) Prolific India batsman Virat Kohli has been nominated in five categories for the first International Cricket Council (ICC) Awards of...

Latest Trending News In India

After braving tear gas, water cannon, farmers halt in Panipat for night

Chandigarh, Nov 27 (IANS) Tens of thousands of farmers up in arms on Thursday braved tear gas shells and water cannons to break through...

Nivar effect: Met dept puts Bengaluru on Yellow alert for next 2 days

Bengaluru: The India Meteorological Department on Thursday issued a yellow alert in Bengaluru and surrounding districts on November 26 and 27.Cyclone Nivar – the...

Premiums on insurance bought during Oct-Mar eligible under LTC scheme

New Delhi, Nov 26 (IANS) Central government employees can claim reimbursement for premiums paid for insurance policies purchased between October 12, 2020 and March...

Sanjay Dutt’s new film ‘Torbaaz’ discusses terrorism with human angle

Mumbai, Nov 26 (IANS) Filmmaker Girish Malik, who directs Sanjay Dutt in his new film Torbaaz, says he wanted to show a story of...