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Govt may hike customs duty on import of APIs by 10-15% to boost local production

BusinessToday.In     August 1, 2020

With the Centre pushing for India's self-reliance in several industries, the Department of Pharmaceuticals (DoP) is planning to hike customs duty on imported active pharmaceutical ingredients (APIs)  by 10-15 per cent.

The government is considering an import duty of 20-25 per cent on APIs, against the current 10 per cent to boost local manufacturing of bulk drugs, according to a report by the  Economic Times.

Currently, India imports 68 per cent APIs and more than 90 per cent antibiotics from China. the country's pharmaceutical industry is the world's third-largest in terms of volume. Even critical APIs, many of which are included in India's national list of essential medicines (NLEM), are being imported from China. APIs are important compounds that are used in the manufacturing of pharmaceutical products.

Last month, the DoP notified two key policies -- Production Linked Incentive (PLI) scheme to promote domestic manufacturing of critical Key Starting Materials (KSMs)/ drug intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) and a scheme for promotion of bulk drug parks.

Incentives of Rs 10 crore were also announced for Indian companies to set up plants to produce 41 products, including 53 crucial APIs which we are currently heavily dependent on China.

These incentives were part of the Rs 10,000-crore production-linked incentive scheme approved by the cabinet in March to speed up the manufacturing of critical bulk drugs and APIs in India.

Also read: Infographic: Bitter Pill -- Indian pharma's dependence on China

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