pharma industry
After reducing the GST rate in the country, the government has now decided to fix the Minimum Import Price (MIP) for the raw materials used in the pharmaceutical sector i.e. pharmaceutical inputs. Due to this, the prices of medicines may increase in the country. Many experts from the pharma industry have expressed concern over this decision of the government. He says that imposing MIP on some essential raw materials will increase the cost of API (Active Pharmaceutical Ingredients) and drug manufacturing companies. When costs increase, its impact will directly reach the patients and medicines will become expensive.
According to the ET report, the purpose of this proposal is to reduce the large-scale import of raw materials from countries like China, as this could affect the sustainability of India’s domestic producers. However, many medical experts are calling this step harmful for the Indian pharma sector. The government is currently considering fixing MIP for Penicillin-G, 6APA and Amoxicillin. Industry officials say that imposing MIP on these essential elements used in antibiotics will have a big impact on MSMEs.
According to the report, more than 10,000 MSME units may be affected by this and many may have to be closed. Due to this, about 2 lakh people may lose their jobs. In September, the government had fixed the minimum price for import of ATS-8 at $ 111 per kg till September 30, 2026. A month later, the government also announced MIP of Rs 1,174 per kg for sulfadiazine till September 30 next year.
positive side
Some experts consider this step of the government as a strong signal towards self-reliant India, because the Indian pharma industry is largely dependent on China for raw materials. In 2020, the government started the Production-Linked Incentive (PLI) Scheme to reduce this dependence, so that domestic companies increase investment in the production of essential raw materials.
However, industry experts say that the PLI scheme was not created to control the prices of 6APA or amoxicillin. If MIP is used now, it may send a message that PLI availing companies want additional protections or benefits beyond the scope of the scheme.