Export of raw materials to India may face greater challenges

As China's largest export destination country for APIs, India accounts for 17% of China's total API exports. According to reports, 70% of the APIs needed by India come from China, while a higher proportion of key starting materials and pharmaceutical intermediates are imported from China. It can be said that India's reputation as a "world pharmacy" is inseparable from the stable supply of China's APIs.

In recent years, India has gone from vigorously encouraging local manufacturing to frequently launching anti-dumping investigations against China, from increasing the difficulty of Chinese companies’ investment in India to banning Chinese-backed apps three times, and even considering imposing tariffs on imported APIs from China. It has the purpose of reducing dependence on Chinese APIs. However, not only did India's imports of raw materials from China have not decreased, but it has maintained positive growth for three consecutive years, with only a slight decrease of 0.73% from January to July this year.

In fact, as an important anti-epidemic material, India’s demand for Chinese APIs has continued to be strong this year. Under normal circumstances, China should achieve rapid growth in its export of APIs to meet its anti-epidemic and economic development needs. In the end, there was a slight negative growth due to various reasons: first, the new crown epidemic in India has become more serious, and the production and export of pharmaceuticals have been affected to varying degrees. This influence has transmitted upwards and reduced the demand for Chinese APIs; second, the private assistance of India The government’s attitude towards China is gradually tough, and the Indian industry is more or less resistant to the import of raw materials from China; third, the risk of trade with India has increased, returns or unclearance cases are frequent, and some companies have chosen to suspend or postpone the transaction to India. Shipment of APIs.

In the short term, India's actions to reduce its dependence on Chinese APIs have generally failed. However, it is undeniable that the Indian government is likely to introduce more, more radical, and stronger policies in the future to push domestic pharmaceutical companies to move from preparations to APIs, from APIs to intermediates, and counter-control upstream along the industrial chain, both in India and abroad. Squeeze the living space of Chinese API companies. In the long run, this will bring huge challenges to Chinese API export companies. The expansion of India's API and intermediate production capacity will lead to more intense competition in the international API market in the future, and India will also reduce its import demand from China. Companies that export raw materials from India may face survival difficulties.