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Problem: Despite being a global leader in generic pharma, India relies heavily on China for 65%-100% of APIs, posing economic and political risks. Chinese firms dominate due to aggressive scaling, price advantages (10%-20% lower), and entrenched vendor relationships, making it difficult for Indian API players to compete. Solution: A two-pronged strategy can be implemented:<ol style="list-style-type:decimal;"><li>Rapid R&D to target new off-patent or low-competition APIs, reduce development lead times, and secure formulation partnerships early.</li><li>Improve operational efficiency by eliminating capacity wastage, optimizing production flow, and offering shorter lead times to customers.</li></ol> Benefits: This strategy enables API players to increase output (30%-40%), reduce WIP (40%), shorten working capital cycles, and enhance price competitiveness. Reliable supply and ready delivery help gain market share, making India a globally competitive API hub.

Key Takeaways

API manufacturing in India is less attractive than in China. However, by enhancing operational excellence in manufacturing and R&D, India's API industry can unleash its true potential.

Mighty molecules: Strategies for reclaiming the global API throne

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Explore strategies for India to reduce dependency on Chinese APIs and regain leadership in global pharmaceutical manufacturing. Read more insights from Vector Consulting Group.

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