Govt Moves to Fix Import Price Floor for Penicillin APIs to Protect PLI Investments

The proposed price floor is intended to prevent the dumping of cheap penicillin active pharmaceutical ingredients (APIs) into the Indian market, which industry stakeholders say has made domestic production commercially unviable. Officials indicated that the measure is part of a broader strategy to strengthen India’s self-reliance in essential antibiotics, especially penicillin, which is widely used in both human and veterinary medicine.

Sources said the decision is being coordinated by the Department of Pharmaceuticals, in consultation with other ministries and industry representatives. The price floor mechanism is expected to work alongside existing incentives under the PLI scheme for bulk drugs, which was launched to revive domestic manufacturing of critical APIs, key starting materials, and drug intermediates.

Despite the availability of PLI incentives, domestic penicillin manufacturers have reportedly struggled to scale up operations due to persistent undercutting by imports, particularly from countries with large-scale fermentation capacities. Industry feedback suggests that without a safeguard mechanism like a price floor, new investments under the PLI scheme may not achieve financial sustainability.

Officials noted that the proposed measure is aligned with the government’s larger objective of reducing India’s dependence on imported APIs for essential medicines and ensuring supply chain security. Penicillin, being a critical antibiotic, has been identified as a priority molecule under the bulk drugs PLI programme due to its public health importance and strategic relevance.

The government is also examining global pricing trends, domestic cost structures, and potential trade implications before finalising the import price floor. The move is expected to provide greater visibility and confidence to manufacturers considering investments in penicillin fermentation and downstream processing facilities.

According to a recent media report in Moneycontrol, government sources indicated that the price floor is likely to be notified shortly once inter-ministerial consultations are completed, with the objective of ensuring that domestic API investments under the PLI scheme are adequately protected from price distortions caused by cheap imports.

The proposed policy intervention is being closely watched by pharmaceutical companies and industry associations, which view it as a critical step in restoring India’s capability to manufacture essential antibiotics at scale while maintaining affordability and quality standards.