India Accuses Balaji Amines of Manufacturing Pharma-Grade Propylene Glycol Without Drug Manufacturing Licence

In a fresh regulatory controversy, Indian authorities have accused Balaji Amines, a major chemical manufacturer, of producing pharmaceutical-grade propylene glycol (PG) without holding a valid drug manufacturing licence. The issue surfaced after some batches of PG were found to be substandard, according to government documents. 

Key Allegations & Background

• The Central Drugs Standard Control Organization (CDSCO) claims that Balaji Amines manufactured and sold pharma-grade PG (USP/IP standards) without authorization, a claim made in an internal letter by a senior CDSCO official. 

• Balaji Amines responded that it has not sold PG to pharmaceutical companies intended for direct pharma use since it started making the product in 2022. 

• The company stated that it is permitted only to produce technical-grade and food-grade PG, for use in non-pharmaceutical sectors. 

• Balaji says it applied in January 2025 for a licence to produce pharma-grade PG, and is awaiting approval. 

Discovery & Inspections

• The investigation reportedly began after officials found in April 2024 that a PG batch made earlier was below standard, due to having higher water content than allowed. 

• Drug inspections carried out in March 2025 led to sealing of certain samples, and further scrutiny by both federal and state agencies. 

• In some corporate filings between May 2022 and August 2024, Balaji listed “pharma” as a use case for its PG production capacity. Later filings shifted to reference only “food grade” use. 

Risks, Legal Stakes & Implications 

• In India, manufacturing or selling pharmaceuticals without a valid licence is a serious offense, punishable by up to five years in prison and fines under applicable drug laws. 

• Although regulatory agencies did not detect contamination in Balaji’s PG batches (such as ethylene glycol or diethylene glycol, which have been linked to child fatalities in contaminated cough syrup incidents), the impurity of water content was a violation of standard quality specifications. 

• The company’s market capitalization is around USD 500 million, and its shares have already suffered due to the allegations. 

Outlook & What to Watch 

• The central drug regulator’s next steps could include revoking production permissions, imposing penalties, or pursuing criminal action if wrongdoing is confirmed.

• If Balaji’s licence application for pharma-grade PG is approved, it may defend against accusations by asserting that it followed due regulatory process.

• The case underscores the importance of stringent regulatory oversight in the pharmaceutical raw materials sector, especially for chemicals used in drug formulations.

• Pharmaceutical manufacturers and suppliers will likely watch the outcome closely, given potential ripple effects on supply chains and licensing standards for excipients and raw materials.