Indian SME pharma firms see shift of orders from China; cost, quality concerns remain

MILAN: Small and mid-sized Indian pharmaceutical firms at CPHI Worldwide on Tuesday said they are seeing more orders move from China, particularly for drug intermediates, as Western buyers diversify supply chains, though some cautioned that India still depends on Chinese raw materials and cannot yet match its prices.

CPHI is a major global business-to-business platform for the pharmaceutical industry, bringing together drug manufacturers, API suppliers, Contract Development and Manufacturing Organizations (CDMOs), contract manufacturers, formulation companies and procurement teams.

About 40 small and mid-sized firms are participating in the Indian government pavilion organised by the Pharmaceuticals Export Promotion Council of India (Pharmexcil).


Among those present are Suparna Chemicals, Siddharta International, Rini Life Science, Sarvani Labs, Deccan Nutraceuticals, India Phosphate and Allied Industries, Athulitha Laboratories, Reine Lifescience, Riocare India, Global Pharma, Zeon Pharma Industries India, D H Organics, Clarion Organics, Glukem Biocare, Apionex Pharma, Murli Krishna Exports, Cornileua Pharmaceuticals, J B Khokhani & Co, Gonane Pharma, Chemco Innovative Cheme and JPN Pharma.

Speaking to PTI, Clarion Organics Director Vivek Tiwari said India continues to hold a cost advantage in both intermediates and active pharmaceutical ingredients (APIs) because of cheaper indigenous raw materials and lower labour costs.

He expects India and China to retain their positions for the next 20 years.

Tiwari said his company, in business since 1995, now exports to China an intermediate used in a common decongestant, which it earlier imported from that country.

He added that the firm has received orders from the US over the past year that earlier went to China.

Clarion posted a revenue of about Rs 165 crore in 2025-26 and is targeting over Rs 200 crore this year.

AllChem Lifescience Managing Director Bipin Patel said European buyers, facing high costs at home, want to offload contract manufacturing to Asia, although their preference still leans towards China.

His company has replaced seven to eight Chinese intermediates supplied to Indian API makers since the COVID-19 pandemic, he said.

Laksh Finechem CEO Bharat Dhanak said companies are not abandoning China but are developing alternative sources in India.

Not all saw a decisive change. Murli Krishna Exports Managing Director Vipul Gondhiya said India itself depends heavily on China for raw materials, and buyers still need to be convinced on quality and price.

"Indian suppliers honour commitments even when prices rise, while Chinese suppliers tend to back out," he said.

Chemco International Chairman Deepak Mody said he did not see such a shift.

"We are not competitive," he said, adding that Indian prices are higher than China's, partly because his plant follows zero liquid discharge norms.

Tiwari also flagged power costs in Maharashtra, Gujarat and Andhra Pradesh as the biggest risk to India's competitiveness.

On the recently concluded India-EU free trade agreement, Tiwari said it should benefit Indian firms, though talks have only just concluded.

Zeon Pharma Director Vinod Varma termed it a "win-win" and said India's tightening regulatory standards could draw more European buyers.

Patel was more guarded, saying intermediates makers like AllChem get little beyond duty drawback and that gains would mainly accrue to API and formulation producers.