India wants to spend 23 billion to reduce chemical imports to China

According to a report by the Economic Times of India on September 18, the Indian government is formulating an incentive plan to promote the production of other key industrial chemicals such as medicines and pesticides by local manufacturers. The report pointed out that the Indian Ministry of Chemicals has listed a list of 75 key chemicals. If local manufacturers increase the production of these chemicals, the government of this country may provide 10% of the output value as a reward. According to the plan, the Indian government will spend 250 billion rupees (about 23.03 billion yuan) in the next five years.

You know, China is one of the important sources of India's imports of drugs and other chemicals. Take medicine as an example. According to Observer.com, India imported $3.9 billion worth of APIs in fiscal 2019, a year-on-year increase of 10.5%. In addition, since 2014, the proportion of drugs imported by India from China in its total imports has gradually increased to 70%, and India has also become the country with the highest dependence on the import of Chinese APIs.

In fact, as early as March this year, as China announced the extension of the Spring Festival holiday and postponed the resumption of work in order to combat the epidemic, Indian pharmaceutical companies have suffered a lot. The Secretary General of the Indian Pharmaceutical Alliance (IPA) said that due to the disruption of the local supply chain, the country's large pharmaceutical companies can only maintain for 2 to 3 months, and small companies can only maintain for 30 to 40 days.

Subsequently, in order to reduce the impact of the epidemic on the supply chain and encourage API manufacturers to increase local production, India approved the PLI (Production Linked Incentive) plan. The plan points out that in the next eight years, drugs worth 694 billion rupees will be produced independently to reduce India’s dependence on China’s antibiotics, vitamins, and heart drugs.

However, the PLI plan launched by India at that time did not produce results. The relevant person pointed out that although India has launched the PLI plan for the manufacture of pharmaceutical raw materials, some key chemicals in the country still rely heavily on imports from China. Data show that currently, India’s imports of chemicals are worth more than 15 trillion rupees, of which about 85%-90% come from China.