Indian regulations will hike costs but market will remain competitive, Government tells IPT

By Natalie Morrison

- Last updated on GMT

S R Rao discusses the cost of Indian manufacturing quality with
S R Rao discusses the cost of Indian manufacturing quality with
Domestic regulatory efforts to improve ingredient quality will increase costs but Indian industry will remain competitive, according to the Secretary of Commerce.

Last month at CPhI, asked S R Rao if the Central Drugs Standard Control Organization’s (CDSCO) crack down on manufacturers​ and increasingly strict regulations​ would affect India’s reputation as a cheap source of drug ingredients.

Rao said that although the “evolving standards” ​will increase costs, at present Indian producers can make ingredients cheaper than anywhere else so any additional spending needed to meet the new regulations will have limited impact.

“Currently the way the entire eco system is positioned, we are close to 50 per cent cheaper than any other manufacturers in the world because of innate systems which support the entire commerce sector. We have fantastic human resources, and we have a very strong commitment to keeping costs down.” 

He added that: “I don’t question that costs will increase, we think our cost advantages are so huge these costs can easily be offset.” 

Rao also applaud the Government’s commitment to improving standards, saying “the one thing in medicines there should be more of is quality.”

“Indian citizens have a right to good quality medicines, so that’s where our regulatory regime is constantly working on getting better strategies for drug manufacturing. I don’t see this as a threat. It will add to the cost, but not significantly.”

Government support

Rao told us the Government would offer little financial support to companies affected by regulatory changes.

He said he doubts companies will flout guidelines to cut costs, because quality is like “a virus and you can’t get the bug out of the system,” ​adding that “quality is here to stay.”

The head of commerce also believes the changing regulatory system is going to create stronger ties between Government and industry.

“We have a very robust regulatory set-up which has spread throughout the country and even as we speak the parts are becoming more robust,”​ he said. 

“There is also self-regulation – the industry sees this as an additional selling point for their product. There is a very robust partnership with industry and both sides are committed to quality.”

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