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Shortcomings of Indian Chemical Industry: TIFAC

  • 20 Aug 2020
  • 4 min read

Why in News

Recently, a report by the Technology Information Forecasting and Assessment Council (TIFAC) has highlighted the shortcomings of the Indian chemical industry which prove to be barriers in competing with China.

  • TIFAC is an autonomous organisation and think-tank of the Department of Science and Technology and it commissioned the report in March 2020 when the Covid-19 pandemic had started accelerating in India.

Key Points

  • India does not have enough technology, plants and infrastructure to manufacture key chemicals in a cost-effective and less polluting manner.
  • India has nearly stopped manufacturing several key Active Pharmaceutical Ingredients (API).
    • India has given up the manufacturing of APIs for ascorbic acid, aspartame and antibiotics like rifampicin, doxycycline, tazobactam acid and even steroids.
    • Production of intermediates such as atorvastatin, chloroquine, gabapentin, ciprofloxacin, cephalosporins, immunosuppressants has also been stopped.
  • India depends on China for 67% of chemical intermediates and API that it needs to manufacture drugs and export.
    • India also depends on the USA and Italy for API.
  • The chemical industry is almost entirely dependent on China for chloroquine and hydroxychloroquine (HCQ).
  • Manufacturers are unable to meet the price at which chemicals are produced by China.
    • Solvent and chemicals manufacturing costs in India are over 15% more than in China.
  • The share of Indian bulk drugs and intermediates in the total pharmaceutical export mix reduced to 20% in 2018 from 42% in 2008.

Active Pharmaceutical Ingredients

  • These are significant ingredients in the manufacturing of drugs and are also called bulk drugs.
  • The Hubei province of China is the hub of the API manufacturing industry.

Pharmaceutical Intermediates

  • These are chemical compounds which form the building blocks of the APIs and are produced as a by-product during the production of API.


  • Need for mission mode chemical engineering with defined targets for uninterrupted synthesis of API molecules.
  • Creation of mega drug manufacturing clusters with common infrastructure in India.
  • Development of a technology platform for biocatalysis for cost optimization and investing in the fermentation sector of large capacity.
    • Biocatalysis refers to the use of natural substances from biological sources (such as enzymes) to speed up (catalyze) chemical reactions.
  • Government encouragement for Indian companies working in chemical segments.

Way Forward

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