Industry Odisha Bureau, Oct 08: Western buyers are spreading pharmaceutical orders beyond China, and some Indian firms are benefiting. Drug intermediates lead the gains. Yet Chinese raw materials, higher costs and quality doubts still hold India back.
Western pharmaceutical buyers are widening their supplier base beyond China. That shift is opening doors for some smaller Indian manufacturers. Yet many of those firms still rely on Chinese inputs to fill orders.
Executives spoke at CPHI Worldwide in Milan this week. About 40 small and mid-sized Indian firms joined a pavilion run by Pharmexcil. CPHI gathers drug makers, contract manufacturers, CDMOs and procurement teams from across the world.
Much of the new business involves drug intermediates. These chemicals are building blocks for active pharmaceutical ingredients, or APIs. APIs give a medicine its therapeutic effect. Finished formulations are the tablets and syrups patients take. Each segment has different production economics and supply risks.
Clarion Organics, in business since 1995, once imported a decongestant intermediate from China. It now exports that same intermediate to China, director Vivek Tiwari said. Clarion has also won US orders over the past year that previously went to China. Tiwari credited India’s cost edge to cheaper local raw materials and lower labour. Clarion reported revenue of about ₹165 crore in 2025-26. It is targeting more than ₹200 crore this year.
AllChem Lifescience has replaced seven to eight Chinese intermediates since the Covid-19 pandemic. Its customers are Indian API makers, managing director Bipin Patel said. Such substitution trims import reliance product by product, without ending it.
Patel said high costs are pushing European buyers to outsource manufacturing to Asia. But their preference still leans towards China, he added. Laksh Finechem chief executive Bharat Dhanak said buyers are not abandoning China. They are instead adding Indian sources to spread risk.
Indian suppliers thus compete with China while often depending on Chinese raw materials. Vipul Gondhiya, managing director of Murli Krishna Exports, stressed that dependence. He said buyers still need convincing on both quality and price. Gondhiya argued Indian suppliers keep commitments when prices rise, while Chinese ones often withdraw.
Chemco International chairman Deepak Mody saw no such shift. He said Indian producers are not competitive on price. He noted his plant follows zero liquid discharge norms. Such plants treat and recycle all wastewater rather than releasing it. That protects rivers and groundwater but adds treatment costs.
Tiwari called power costs the biggest risk to India’s competitiveness. He singled out Maharashtra, Gujarat and Andhra Pradesh. Chemical processes need steady energy for heating, cooling and purification.
Tiwari expects the recently concluded India-EU free trade agreement to help Indian firms. He noted, however, that talks have only just ended. Zeon Pharma director Vinod Varma called the deal a win-win. He said India’s tightening regulatory standards could attract more European buyers. Patel was more guarded, saying intermediate makers gain little beyond duty drawback. API and formulation producers would likely capture most benefits, he argued. Any gains also depend on how the agreement is implemented.
