Pharmaceuticals: Follow one offering through the chain
Drug discovery, manufacturing and distribution, from small-molecule generics to biologics
Follow one offering through the chain
A strip of paracetamol made in India
Follow a Dolo 650 tablet from a chemical plant in China or Gujarat to your chemist's counter.
A key chemical, mostly from China
73.7%China's share of India's API importsParacetamol starts as para-aminophenol (PAP), made by hydrogenating nitrobenzene. India has long bought most of its PAP and other intermediates from China, which in FY25 still supplied 73.7% by value of India's US$ 4.35 billion of API and intermediate imports. Under the PLI scheme, Meghmani (13,500 tonnes) and Sadhana Nitro Chem (12,000 tonnes) had installed PAP plants by December 2022.1,2
Constraint India's 25,500 tonnes of PLI-backed PAP capacity (calculated, 2022) must compete on price with larger, older Chinese plants. KSM Pharma starting materials and intermediatesBz BenzeneHNO3 Nitric acidH2 HydrogenTurned into pure API near Hyderabad
39,360 tGranules total API capacity, 2024An API maker reacts PAP with acetic anhydride, then crystallises, dries and mills the paracetamol to pharmacopoeia purity. Granules India, near Hyderabad, is a leading producer: ICRA put its total API capacity at 39,360 tonnes a year in November 2024, and five legacy molecules including paracetamol made up 75% of its FY24 revenue. It plans its own PAP plant.3
Constraint Paracetamol is a thin-margin bulk API, so PAP and acetic anhydride prices set its cost; each approved API source is named in drug filings. API Small-molecule APIsAPAP ParacetamolAcOH Acetic acidKSM Pharma starting materials and intermediatesH₂O WaterWater and sanitationPressed into a 650 mg tablet
650 mgparacetamol in each Dolo tabletA formulator blends the API with starch, binders and lubricants, granulates the mix, compresses it into tablets and seals them in blister strips. Bengaluru's Micro Labs chose 650 mg for Dolo, against the 500 mg most brands use, and grew to an annual turnover of about Rs 2,700 crore, Rs 920 crore of it from exports (reported in 2022).4
Constraint Tablets need API of steady particle size; changing an approved API or excipient supplier needs a regulatory variation filing. APAP ParacetamolExc Pharmaceutical excipientsStr Starch and cellulose derivativesPVC PVCAl AluminiumPaper and packagingPlastic and rubber productsHeld to revised Schedule M rules
Rs 250 crturnover cut-off for the later deadlineThe plant needs a state drug licence and must meet Good Manufacturing Practice. Revised Schedule M, notified in December 2023, tightened rules on quality systems, validation and contamination control; firms with turnover below Rs 250 crore had until 31 December 2025, and all units must comply from January 2026. Export plants also face US FDA inspections, and the US takes over a third of exports.5,7
Constraint Upgrading clean rooms, water systems and laboratories to revised Schedule M is costly for small plants, and non-compliant units risk suspension. Rgt Reagents and high-purity lab chemicalsH₂O WaterProfessional servicesMoved through stockists to chemists
350 croreDolo tablets sold, March 2020-January 2022Wholesalers and stockists buy from the maker, hold stock, extend credit and deliver to chemists, often more than once a day. In a crisis this network can move huge volumes: more than 350 crore Dolo-650 tablets were reported sold between March 2020 and January 2022, against nearly 7.5 crore strips in all of 2019 (IQVIA, via IANS).4
Constraint Trade margins are thin and fixed by custom and price rules, so stockists carry little buffer stock when demand spikes, as in 2020-21. APAP ParacetamolOil Crude oilTransport and logisticsSold as a brand or a generic
15,291Jan Aushadhi Kendras, March 2025The strip reaches the patient through a chemist, either as a brand at its printed price or as an unbranded generic. The government's Jan Aushadhi scheme had 15,291 outlets by March 2025, selling generics it says are 50-80% cheaper than branded medicines. For an everyday tablet like paracetamol, the margin left at each link of the chain is small.6
Constraint Each outlet needs a registered pharmacist and a drug licence, and Jan Aushadhi stores depend on timely central supply of generics. APAP ParacetamolAPI Small-molecule APIsWholesale and retail tradeWhat the chain shows
The tablet is Indian but its key chemical has long been Chinese: home-grown PAP under the PLI scheme is both the chokepoint and the opportunity.
Sources
- PLI scheme for bulk drugs: products, companies and installed capacity (as on 30.12.2022) Department of Pharmaceuticals, Government of India, 2023
- Rajya Sabha Q&A: India's dependence on imported APIs (Ministry of Chemicals and Fertilisers reply, DGCIS data) The Policy Edge, 2026
- Granules India Limited: rating rationale ICRA, 2024
- Dolo pill breaks sales record in pandemic as manufacturer makes a fortune Business Standard (IANS), 2022
- Small pharma companies get 1-year breather to implement Schedule M Business Standard, 2025
- Jan Aushadhi Diwas 2025 (backgrounder) Press Information Bureau, 2025
- India's pharmaceutical exports reach over 30 billion dollar in financial year 2024-25 All India Radio News Services, 2025