In a major relief to the import-dependent Indian pharmaceutical industry, Chinese state-owned Sichuan Airlines has resumed its cargo services to India. The decision of Sichuan to suspend its services to India due to increasing COVID-19 cases for 15 days from the end of last month had threatened to disrupt the pharmaceutical, medical devices and oxygen concentrator supply chains.
It is known that Sichuan Airlines is restarting its operations from Chengdu to Chennai on May 12, while it had already resumed operations from Chengdu to Bengaluru on May 9. China has also permitted multiple cargo operations to India to avoid a crisis. Chengdu is one of the major sources for pharmaceutical raw material for Indian drug manufacturers.
India is sourcing almost 70 per cent of drug intermediates, key starting materials and active pharmaceutical ingredients (APIs) -- all essential raw materials needed to manufacture medicines from China. Almost 50 per cent of the APIs that go into the manufacture of products mentioned in the National List of Essential Medicines (NLEM) are also imported from China. Even though India's production linked incentive (PLI) scheme aims at reducing this import dependency, it can only have an impact in the medium to long term.
The Pharmaceuticals Export Promotion Council of India (Pharmexcil) had sought the intervention of the Indian embassy in China to make necessary measures to restore the supply chain of pharmaceutical raw materials by either persuading Sichuan Airlines to resume its operations or arranging India air cargo players to lift the medical supplies in larger public health interest. With increased demand from within India and abroad, Indian pharmaceutical industry is struggling hard to meet its supply commitments at the moment. The industry was already reeling under immense pressure due to increased freight cost and shortage of containers when China decided to suspend its cargo services to India as a COVID-19 precaution. The fear was that the suspension of services will have a cascading effect on its entire supply chain and lead to shortage of essential medicines within India and in other export markets.
Indian pharmaceutical exports had recorded 18 per cent growth in 2020-21 and touched the $24.4 billion mark.