However, India and other countries still remain largely dependent on China for the raw material used to make drugs, known as active pharmaceutical ingredients (API).
“Indian API players are witnessing benefits of better inventory management and thrust on supply chain continuity from customers. Customers’ procurement strategies are recalibrating and are now moving away from China or seeking alternative sources for the same API,” said Krishnanath Munde, associate director at Ind-Ra.
Price sensitivity among formulation companies is declining amid a receding threat of supply chain disruptions from Chinese suppliers, which had also occurred in the past, he said. Considering that India has the highest number of API facilities approved by the US Food and Drug Administration, it will remain a critical part of the global supply channel, Munde noted.
Indian pharma companies have seen a rush of demand for key drugs used in the treatment of Covid-19 in the past two months.