Govt Extends Import Price Curbs on Two Pharma Raw Materials

The government extends import price curbs on two pharma raw materials and gives domestic producers a short breathing space.

The Directorate General of Foreign Trade has prolonged the minimum import price on ATS-8 and Sulfadiazine API until November 30.

ATS-8, a key intermediate for the widely used cholesterol drug atorvastatin, carries a floor of USD 111 per kg.

Sulfadiazine, used in antibacterial formulations, carries a floor of USD 1,774 per kg.

The two-month extension arrives amid continued pressure from low-priced Chinese supplies and questions about whether the safeguard is truly working.

Two-Month MIP Extension: Temporary Relief or Policy Strain?

The unusually short window raises questions about the tool’s effectiveness.

• The MIP was first imposed in September last year and was due to expire on September 30.
• Authorities have now pushed the cover only until the end of November.
• Export-oriented units and supplies heading to Special Economic Zones continue to enjoy exemptions.

A brief extension can signal that policymakers recognize ongoing distress yet remain cautious about locking in longer restrictions. It also leaves domestic manufacturers uncertain about the durability of protection and forces them to plan inventories around a narrow horizon.

Also Read: Counterfeit Drugs in India: How Packaging Gaps Hurt Supply Chain

Who Feels the Impact: Domestic Intermediate Makers Vs Formulators

Both APIs fall under the Production Linked Incentive scheme that aims to build domestic capacity. Yet Chinese suppliers still undercut the floor through cross-subsidization strategies.

• Industry executives report that ATS-8 continues to arrive at prices as low as Rs 9,500 per kg, well below the prescribed USD 111 threshold.
• Domestic producers therefore face inventory overhang and soft order flows.
• Formulators of atorvastatin and sulfadiazine-based medicines benefit from cheaper imported intermediates, while intermediate manufacturers absorb the margin pressure.

The MIP therefore protects upstream PLI participants in theory, but incomplete enforcement and alternative sourcing routes dilute the intended relief.

India’s Broader Response to Chinese API Pricing Power

China accounts for roughly 73.7 percent of India’s USD 4.35 billion API and intermediate imports in FY25. Successive governments have relied on tools such as minimum import prices to counter this dominance.

The latest short extension on ATS-8 and Sulfadiazine shows that authorities continue to reach for price floors when dumping concerns intensify. At the same time, the limited duration and persistent undercutting suggest that MIP alone has not yet shifted market dynamics in a decisive way.

Domestic manufacturers keep calling for stronger enforcement and longer visibility so that PLI investments can generate steady utilization. Until those conditions improve, the two-month extension offers only temporary shelter rather than a structural solution.