Tensions between India and Pakistan could have a knock-on effect on India’s relationship with China – potentially spelling disaster for India’s pharmaceutical industry.
The relationship between India and Pakistan had shown some signs of improvement since the beginning of the decade. Last year, Nerandra Modi became the first Indian Prime Minister to visit Pakistan since 2004. However, the delicate peace process has stalled in the wake of terrorist incidents such as the attacks on Pathankot in January and Uri in September – “the deadliest attack on security forces in Kashmir in two decades.”
China has been described as a “a friendly neighbour” by Chinese foreign ministry spokesman Geng Shuang. However, China has — as always — sided with Pakistan against India regarding the Kashmir conflict. It has also pledged to “extend its full support to Pakistan” if the country were threatened with “any case of foreign aggression.” (Although there was a sensational and much-debated story in Dawn, Pakistan’s leading daily, that China “has indicated a preference for a change in course by Pakistan”).
A decline in diplomatic relations between India and China could result in a public health crisis. China supplies approximately 80 percent of active pharmaceutical ingredients (API) to India. Any disruption could lead to a severe drugs shortage.
The ramifications of this would be felt globally. India is a major exporter of cheap, generic drugs to the developing world. As such, it is widely touted as “the pharmacy of the developing world.”
In November 2014, National Security Advisor Ajit Doval cautioned against India becoming dependent on China to supply the raw materials necessary to produce essential medicines, with the Times of India reporting at the time “any kind of tension or adverse circumstances between the two countries have potential to lead to a crisis in public health in India. Experts say China has antagonized many of its neighbours in the past and India should take a call based on its economic and strategic relationship with the country.”
This has led to efforts to reverse the downturn in manufacturing APIs in India. Indian producers have been shut out of the market by their Chinese competitors, who are alleged to have been highly subsidised by the Chinese government. Their produce is much cheaper as a result.
Indian pharma must now be safeguarded against international tensions, many officials say. To this end, a senior official in the Central Drug Standard Control Organisation has said that the Indian government is planning to meet with domestic drug producers to “see if we can create our own capacities and reduce the dependence on another country.”