The domestic pharmaceutical industry is highly dependent on imports, with more than 60% of its active pharmaceutical ingredients (API) requirement being imported, and in some specific APIs, like cephalosporins, azithromycin and penicillin, the dependence is as high as 80 to 90%. Of the total imports of APIs and intermediates into India, China accounts for ~65-70%. The situation is more alarming in case of intermediates of stages prior to APIs and key starting materials (KSMs) which are the building blocks for the drugs, wherein, in some cases, China is the exclusive supplier. For instance, PenG and 7ACA, the key raw materials required for manufacturing cephalosporins are manufactured exclusively in China.Additionally, for some input materials, even if alternate sources are available, China remains the preferred source given the economical rates.

According to ICRA research, the domestic API manufacturers have an inventory of one-two months, which should adequately support their production till mid-March 2020. Continuation of the virus outbreak, however, beyond mid-March 2020 may adversely impact production of these API manufacturers, possibly leading to a complete halt of production for some smaller players.