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India Sets Minimum Import Price on Key Pharma Inputs to Counter Chinese Undercutting

The policy is intended to deter extremely low-priced shipments that can disrupt local manufacturing and erode the competitiveness of India’s drug producers.

• By Newsdesk
• New Delhi
• Dec 22, 2025

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In a bid to shield its domestic pharmaceutical sector from predatory pricing practices, the Government of India has introduced a minimum import price (MIP) for several critical pharmaceutical raw materials, particularly those predominantly sourced from China. 

The move, announced through a notification by the Directorate General of Foreign Trade (DGFT), requires imports of select drug intermediates and active pharmaceutical ingredients to meet strictly defined price floors. The policy is intended to deter extremely low-priced shipments that can disrupt local manufacturing and erode the competitiveness of India’s drug producers. 

Among the materials affected, the import price of diluted potassium clavulanate and its derivatives has been set at US $180 per kilogram equivalent (KGA), while ATS-8, a vital precursor in producing atorvastatin calcium cannot be imported below US $111 per kilogram. These inputs are essential to antibiotics and cholesterol-lowering medicines produced by India’s pharmaceutical sector. 

Officials say the price floors will remain in force until November 30, 2026, creating a level playing field for Indian manufacturers who have struggled with cheaper imports that undercut domestic production costs. It also aligns with broader government efforts aimed at reducing reliance on Chinese supply chains and promoting local drug manufacturing. 

However, industry voices have raised concerns over potential side effects of the policy. Several pharmaceutical executives and analysts warn that imposing MIP could inadvertently raise production costs for manufacturers, particularly smaller players, and ultimately lead to higher medicine prices for consumers. Critics also argue that a price floor alone does not substitute for strengthening indigenous capacity across the entire supply chain. 

The government first began experimenting with minimum import prices for pharmaceutical inputs earlier this year, including a price fix for sulphadiazine, and is positioning the latest move within a larger strategy to balance market dynamics while nurturing domestic industry under incentives such as production-linked schemes.