India's API imports fell 4.9% YoY in 7M FY 2020

This followed two years of increasing import dependency for API.

India’s imports of active pharmaceutical ingredients (API) declined 4.9% YoY to $2.1b during the April-October period, according to a report by CARE Ratings. This followed after a 9.3% and 18.8% rise in FY18 and FY19, respectively, on a YoY basis.

Still, the country sources over 60% of APIs from other countries, with some specific APIs dependent on imports for as much as 80-90%. China accounts for more than 65% of the total bulk drugs and drug intermediate imports by India, attributed to their cheap availability in the country.

“High dependency on imports constrains manufacturing capacity at home and significant dependence on a particular source becomes a threat as a disruption at this source has the potential to impact the overall industry supply chain,” the report stated.

In particular, the import unit realisation of bulk drugs and drug intermediates from China had increased surged 44.1% YoY to $13.4 per kg and grew 14.3% to $12.8 per kg in Q2 and Q3 2018, respectively. Around that time, China experienced some supply disturbance due to environmental and regulatory challenges faced by the Chinese firms.

On the bright side, pharma exports grew 10.9% YoY during FY19 and 10.7% to $12b during April-October 2019. This was attributed to a 23.4% rise in exports to the US, which accounted for 33.1% of the country’s total pharma exports, as the price erosion environment receded.

In contrast, outbound shipments to other parts of the world except for US were up by a slower 5.3%. Exports to these markets had increased by 12.7% during April-October 2018.

The pharma exports in India are projected to rise 10% YoY to $21.2b in FY 2020, continuing with the same growth momentum from FY 2019, backed by higher exports to USA amidst easing price erosion environment.