India’s production-linked incentive (PLI) scheme is meant to boost domestic manufacturing and exports. It rewards a range of companies, including those that produce 41 critical molecules in active pharmaceutical ingredients, or APIs.
Meanwhile, Chinese manufacturers have slashed their prices of several important APIs by 40–50%. In some cases, these prices are below the cost of production in India.
Even though the adjustment won’t be permanent, those lowered prices are a major blow to Indian companies that were making headway for the past five years in API production, and which formed India’s muscle in this space.
This isn’t the first time for Chinese producers to undercut their Indian competitors. The same situation happened in the 2000s. Here’s the kicker: aside from the Indian government’s PLI scheme, few conditions have improved for API manufacturers.
The Ken reporter Sudeshna Ray explores the issue in this edition of Make India Competitive Again, as read by Seetharaman G.
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