Here’s a terrifying thought: A toxic stew of corporate neglect, lax regulators and a defensive government might be turning India’s water bodies into breeding grounds for drug-resistant "superbugs". This, certainly, is what a series of recent reports and studies have suggested. And the Indian government’s response to the reports won’t set many minds at rest.Consider the southern Indian city of Hyderabad, known as much for its lakes as for its cutting-edge IT and biotech companies. According to Reuters, Kazhipally Lake near Hyderabad has become “a giant petri dish for anti-microbial resistance." The lake -- close to manufacturing facilities for hundreds of Indian companies making generic drugs, as well as some multinationals -- has been studied for a decade by researchers from the University of Gothenborg in Sweden, who have consistently documented far higher-than-normal levels of drug-resistant pathogens in the water. The companies insist that they follow all relevant environmental regulations and don’t discharge waste into the lake or other water bodies.The studies find that pathogens appear to be interacting and developing in unexpected directions, and could transfer their drug resistance to, for example, E. coli. India, of course, is one of the most unsanitary countries in the world and E. coli is everywhere -- in 92 percent of Mumbai’s ice cubes, for one. Most strains are already resistant to various antibiotics.The threat from antibiotic resistance should scare us all. We take so much of the post-penicillin world for granted, including the simple assumption that one’s likely to recover from a simple surgery. The stakes for India are even higher; some studies have suggested that 58,000 Indian babies die every year because of newly drug-resistant diseases. One study of a particular common pathogen in an Indian hospital found that about seven percent of the specimens were resistant to even the latest antibiotics.For awhile it looked like the Indian government was taking the matter seriously. A commission was set up in 2011 which duly produced a report on how to contain the growth of anti-microbial resistance. Yet too little has changed since. Antibiotics are still readily available over the counter, and people still self-medicate. The Indian government has notably failed to institute and implement real regulations to stop chemists from handing out antibiotics like cheap candy.Yet at least the government has come around to admitting that there's something wrong with how India prescribes antibiotics. Where it's notably failed is in admitting that India’s famous pharmaceutical sector may be equally to blame.Remember, India’s generics companies are national heroes. It's true that some have been accused by whistleblowers of deliberately deceiving regulators and shipping sub-standard AIDS drugs to Africa (“Who cares? It’s just blacks dying," one company executive was reported to have said.) And it’s also true that, over the past seven years, the USFDA has issued 50 warning letters to Indian pharmaceutical companies and shut down many of their exports. But as far as the Indian government is concerned, those moves represent unfair trade restrictions, not a response to sub-standard conditions at generics factories -- for example, toilets without running water for employees to wash their hands.One is forced to believe India’s top regulator, who said, in a moment of unexpected candor, that if he followed global standards he would have to shut down almost all Indian drug factories. Yet such companies remain above official criticism. Whether this is the consequence of hyper-nationalism, old-fashioned lobbying or something else remains unclear.India’s commerce ministry was even willing to shoot down a much-needed free-trade deal with the European Union because a couple of European drug regulators didn’t think one Indian factory was safe enough. A trade body set up by the ministry also reacted defensively to various studies of the "petri dish" lakes of Hyderabad, dismissing the findings as “adverse propaganda." And, of course, India’s pharmaceutical companies can count on support from activists in the West, who seem to imagine that the benefits of providing cost-effective drugs outweigh any other potential flaws.Antibiotic resistance is a crisis on the level of climate change. It’s already killing tens, perhaps hundreds of thousands a year. And the villains aren’t simple. Yes, the BRICS countries alone account for 76 per cent of additional antibiotic use in the first decade of the century. But don’t just blame self-medicating consumers in India and China. The world also needs to be looking more closely at drugmakers in both countries and the governments that choose to protect them.(This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners)