With the ongoing crisis in West Asia beginning to ripple through global supply chains, India’s pharmaceutical manufacturing sector—particularly its micro, small and medium enterprises (MSMEs)—has started feeling the heat. Drawing the attention of the government towards this mounting pressure, the Himachal Drug Manufacturers Association (HDMA) has sought urgent intervention from the Centre to address a sharp rise in input costs and emerging shortages of critical raw materials.
Representing nearly 500 pharmaceutical units in Himachal Pradesh, the association has flagged an unprecedented 200–300% increase in the prices of active pharmaceutical ingredients (APIs), solvents, excipients, and packaging materials.
In a representation to the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers, the association recently warned that such steep escalation is threatening both the viability of MSMEs and the steady supply of essential medicines.
The association pointed out that even commonly used APIs have witnessed sharp spikes. “The price of paracetamol API has risen from Rs 250 per kg to Rs 450 per kg within a span of just 15 days,” a representative said, adding that similar trends are visible across a wide range of raw materials. Packaging inputs—including plastics, aluminum, and paper—have also become significantly more expensive, compounding the cost pressures.
Industry representatives also pointed out that many units, especially in the MSME segment, operate on thin margins and are bound by fixed-rate contracts under government tenders. The sudden surge in input costs has made it increasingly difficult for manufacturers to honor existing supply commitments, raising concerns about disruptions in the availability of essential drugs.
Adding to the challenge are reports of artificial shortages in the supply chain, allegedly driven by hoarding and black marketing. The association has urged the government to step in with stricter monitoring mechanisms to ensure transparency in distribution and prevent speculative practices. “There is an urgent need to track stock positions with distributors and vendors, and scrutinize GST invoicing patterns to identify irregularities,” the representation noted.
The crisis has also affected fuel availability, with shortages of LPG—used in industrial boilers—posing operational challenges. Industry leaders warned that prolonged disruption could lead to partial or complete shutdown of units, resulting in job losses and potential labor migration, particularly in manufacturing clusters.
In view of the situation, the association has called for a series of immediate measures. These include capping the prices of key raw materials, ensuring equitable distribution, and invoking provisions of the Essential Commodities Act, 1956, to prevent hoarding and profiteering. It has also urged the National Pharmaceutical Pricing Authority to actively monitor the prices and availability of APIs, excipients, solvents, and packaging inputs such as LDPE and HDPE granules, PET bottles, aluminum, and glass containers.
Further, the association has proposed the creation of an emergency task force comprising government officials and industry representatives to address the evolving crisis in real time. Such a mechanism, it said, would help ensure coordinated action and timely interventions.
“The MSME pharma sector seeks urgent support to ensure India’s healthcare stability,” the association stated, emphasizing that it is presenting ground-level realities to prevent disruption in medicine supply. It has also called for strict action against entities involved in creating artificial shortages.
A large portion of APIs and chemical inputs are derived from petroleum-based products. As a result, any rise in crude oil prices has a direct cascading effect on the cost of pharmaceutical manufacturing. Higher crude prices increase the cost of solvents, intermediates, and packaging materials such as plastics and polymers, thereby pushing up overall production expenses, explained a representative from the HDMA.
