India Pharma Outlook Team | Tuesday, 23 June 2026
The government’s push to strengthen domestic pharmaceutical manufacturing through the Minimum Import Price (MIP) framework has yet to deliver visible gains, with industry stakeholders indicating that demand recovery remains sluggish despite regulatory support.
Introduced earlier this year, the MIP policy aims to curb low-cost imports of key pharmaceutical raw materials by setting threshold prices. The move is part of a broader strategy to boost local production and reduce dependence on imports, particularly from cost-competitive markets.
However, several executives suggest that the intended benefits have not yet translated into tangible improvements for domestic manufacturers.
At the core of the challenge lies weak demand for domestically produced raw materials, even after import restrictions were put in place. Industry executives point out that buyers, traders, and finished dosage form (FDF) manufacturers have been slow to shift sourcing strategies in line with the revised pricing structure.
“Demand is yet to return and that raises concerns about the effectiveness of a policy to bolster domestic pharmaceutical manufacturing,” a senior industry executive said. He added that while the government’s intent to strengthen the Make in India initiative is clear, market response has been muted.
This hesitation has had a direct impact on capacity utilization. “A significant installed capacity is lying underutilized,” the executive noted, highlighting the gap between policy intent and market behavior.
The MIP framework currently applies to several critical antibiotic inputs, including penicillin G and its salts, 6-APA, and amoxicillin. According to the Directorate General of Foreign Trade (DGFT), the import price thresholds have been fixed at Rs 2,216 per kg for penicillin, Rs 2,733 per kg for amoxicillin, and Rs 3,405 per kg for 6-APA.
These benchmarks were designed to create a level playing field for domestic producers by preventing cheaper imports from undercutting local manufacturing. However, the persistence of low demand suggests that pricing controls alone may not be sufficient to drive a shift in procurement patterns.
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Some industry participants attribute the current slowdown to a temporary imbalance caused by pre-emptive stockpiling. Ahead of the MIP rollout, several buyers accumulated inventory in anticipation of price changes, reducing the immediate need for fresh procurement.
“Many buyers had stocked up heavily on a few raw materials in anticipation of MIP kicking in, and that could be one of the reasons for the lukewarm response,” another executive explained. He added that as these inventories are gradually depleted, demand is expected to normalize, potentially improving uptake for domestic suppliers.
This perspective suggests that the policy’s impact may be delayed rather than ineffective, contingent on the pace at which existing stockpiles are absorbed by the market.
Despite expectations of a gradual recovery, some industry leaders remain cautious about the policy’s overall effectiveness. Namit Joshi, Chairman of Pharmexcil, highlighted the disconnect between capacity and demand.
“We got the MIP in September 2025, pre-war, and till date we have low volumes despite having double the capacity India needs. MIP on ATS-8 completely debunks the myth of demand and supply,” he said.
His remarks underline a broader concern that structural issues such as buyer preferences, pricing sensitivities, and global supply dynamics may continue to influence sourcing decisions, limiting the immediate benefits of protectionist measures.
While the MIP policy reflects a strong policy push toward self-reliance in pharmaceutical manufacturing, its success will ultimately depend on market alignment. Industry players suggest that sustained demand, competitive pricing, and consistent quality will be critical in driving long-term adoption of domestically produced inputs.
For now, the sector appears to be in a transition phase, with policy support in place but market momentum yet to fully build. As inventory levels decline and procurement cycles reset, the coming months will be crucial in determining whether the MIP framework can deliver on its promise of strengthening India’s pharmaceutical supply chain
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