India's dominance in generic pharmaceuticals is built on legal, economic, and technological pillars that are now under external stress. Examine the policy measures needed to sustain India's role as the 'pharmacy of the world'.

Q. India's dominance in generic pharmaceuticals is built on legal, economic, and technological pillars that are now under external stress. Examine the policy measures needed to sustain India's role as the 'pharmacy of the world'. (15 marks, 250-350 words)

India is the world's third-largest drug producer by volume and a major supplier of generic medicines to the United States and Africa [1]. This "pharmacy of the world" status rests on three pillars — a permissive patent law, export scale, and manufacturing capability — each now facing external strain.

Legal pillar under stress - The Patents Act, 1970, through Section 3(d) (curbing evergreening) and Section 84 (compulsory licensing), enabled low-cost reverse-engineered generics [2]. These TRIPS flexibilities face sustained pressure in bilateral trade negotiations. - The US Section 232 national-security tariff route bypasses WTO dispute timelines, blunting India's rule-based defence.

Economic pillar under stress - Pharma exports touched $30.47 billion in FY2024-25, with the US alone taking about 34% [3] — a sharp concentration risk. - Recent US tariff action on branded/patented imports spares generics, but the exemption is conditional; wafer-thin generic margins leave little cushion to absorb duties.

Technological pillar under stress - India leads in USFDA-approved plants, yet remains heavily import-dependent on Chinese Key Starting Materials and APIs, keeping domestic value addition low and presence in biologics thin [4].

Policy measures needed - Deepen bulk-drug self-reliance: accelerate the ₹6,940 crore PLI for KSMs/DIs/APIs, covering 41 critical products, to cut single-source dependence [4]. - Climb the value chain: channel the PLI Scheme for Pharmaceuticals toward biosimilars, complex generics and patented molecules [5]. - Diversify markets into the EU, Africa, LATAM and ASEAN, while negotiating a durable pharma carve-out in the India-US trade agreement. - Protect regulatory credibility through stronger domestic quality oversight, since import alerts damage market access more than tariffs.

India's leadership was won by legal foresight and manufacturing scale, not cheap labour alone; sustaining it now demands a shift from volume to value. A calibrated mix of import substitution, innovation-led incentives, market diversification and trade diplomacy can turn this tariff shock into an upgrading opportunity, keeping affordable medicines flowing in line with SDG-3's promise of universal access to essential medicines.

(~325 words)

Sources: 1. India's Pharmaceuticals in Global Healthcare — PIB — India's global rank by volume and role as generic supplier 2. The Patents Act, 1970 (as amended) — India Code — Section 3(d) anti-evergreening and Section 84 compulsory licensing 3. Chintan Shivir: India crosses $30 billion pharma export mark — PIB — FY2024-25 exports of $30.47 billion; ~34% US share 4. Approvals under PLI Scheme for KSMs/Drug Intermediates/APIs — PIB — ₹6,940 crore outlay, 41 critical products, import-dependence reduction 5. Production Linked Incentive Scheme for Pharmaceuticals — PIB — high-value product incentives for biosimilars and complex/patented drugs