In an effort to protect India’s pharmaceutical industry from the growing influx of cheap Chinese imports, the government is preparing to impose a Minimum Import Price (MIP) on select critical drug raw materials, including active pharmaceutical ingredients (APIs) and drug intermediates, according to official sources.
Ensuring Supply Chain Security
The planned move aims to safeguard domestic manufacturers and strengthen supply chain resilience amid rising geopolitical trade disruptions. Around 10 key pharmaceutical inputs—including essential components for antibiotics and anti-cholesterol medicines—are under review for MIP enforcement. The government has also identified these items among the 41 critical raw materials under the Production-Linked Incentive (PLI) scheme, which seeks to boost local production and reduce import dependency.
How MIP Works
A Minimum Import Price acts as a price floor, making ultra-low-cost imports less competitive in the domestic market. This would come in addition to existing customs duties, similar to MIP policies already applied to apples and, more recently, soda ash, a vital raw material for glass, soaps, and chemicals.
Ongoing Consultations and Impending Decision
Government–industry consultations are still underway, and an official decision is expected soon. The strategy mirrors earlier interventions in sectors like mobile handset manufacturing, where a mix of PLI incentives and import protections fostered domestic production ecosystems.
Industry Debate Over Pricing Impact
The proposal has triggered debate within the pharmaceutical ecosystem. Finished formulation manufacturers fear that increased input costs may affect their production expenses and global competitiveness. On the other hand, experts highlight that China’s aggressive pricing, especially over the past two years, has eroded Indian manufacturers’ market share through predatory pricing tactics.
A Significant Policy Shift Ahead
If implemented, the MIP on pharmaceutical inputs would mark a major policy shift in India’s efforts to protect its pharmaceutical value chain, balancing the need for affordable medicines with long-term domestic manufacturing security.
