India Sets Import Price Floor On Key Penicillin Ingredients To Protect Drug Supply

In a significant move aimed at strengthening India's pharmaceutical manufacturing ecosystem, the Central government has imposed a minimum import price (MIP) on three critical raw materials used in the production of penicillin-class antibiotics. The decision, notified by the Directorate General of Foreign Trade (DGFT) on January 29, places Penicillin G-potassium, 6-Aminopenicillanic Acid (6-APA), and Amoxicillin Trihydrate under the restricted import category for a period of one year. These bulk drugs form the backbone of widely prescribed antibiotics used to treat bacterial infections ranging from respiratory illnesses to severe systemic infections.

India, often referred to as the "pharmacy of the world," has in recent years expressed concern over heavy dependence on low-cost imports for critical pharmaceutical ingredients, particularly from a limited number of global suppliers.

By setting a price floor on imports, the government aims to prevent market distortion caused by ultra-cheap imports, support domestic manufacturers, and ensure long-term availability of essential antibiotics, an issue that has become increasingly important amid rising antimicrobial resistance and global supply chain disruptions.

What The DGFT Notification Says

According to the DGFT notification, imports of the three penicillin ingredients below specified CIF (cost, insurance and freight) values will be restricted for one year from the date of publication:

• Penicillin G-potassium: Minimum CIF value of INR 2,216 per kg
• 6-APA: Minimum CIF value of INR 3,405 per kg
• Amoxicillin Trihydrate: Minimum CIF value of INR 2,733 per kg

Imports priced below these thresholds will require special permission, effectively limiting the inflow of low-priced consignments that undercut domestic production.

However, the restriction does not apply to:

• 100 per cent Export Oriented Units (EOUs)
• Units located in Special Economic Zones (SEZs)
• Imports made under the Advance Authorisation Scheme

These exemptions are subject to the condition that the imported inputs are not sold in the domestic tariff area, ensuring that export-focused manufacturing remains unaffected.

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Why Penicillin Ingredients Matter For Public Health

Penicillin and its derivatives remain among the most commonly used antibiotics globally, particularly in low- and middle-income countries. According to the World Health Organization (WHO), access to affordable, quality-assured antibiotics is essential for preventing avoidable deaths from treatable bacterial infections.

At the same time, the Indian Council of Medical Research (ICMR) has repeatedly flagged concerns about antibiotic availability, quality, and supply resilience as India battles rising antimicrobial resistance (AMR). Over-dependence on imported active pharmaceutical ingredients (APIs) has been identified as a strategic vulnerability in multiple government reports.

By supporting domestic production of key antibiotic inputs, the policy aligns with broader initiatives such as Atmanirbhar Bharat and the Production Linked Incentive (PLI) scheme for bulk drugs, which aim to rebuild India's self-reliance in critical medicines.

Balancing Industry Support And Patient Access

While the import price floor is designed to protect domestic manufacturers, policymakers must also ensure that the move does not inadvertently raise costs for patients. Public health experts note that stable domestic production can, over time, help prevent price volatility and shortages, both of which can be more damaging to access than short-term cost adjustments. The government has stressed that the measure is temporary, targeted, and subject to review, indicating an attempt to strike a balance between industry sustainability and public health needs.

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