Let's talk about the Indian pharma- ceuticals industry and its continuing troubles over regulatory issues. The American drug regulator, Food and Drug Administration (FDA), keeps telling drug companies that they are not running their factories to high-enough quality standards, or, at least, that they are not documenting and recording the minute details of how they run their plants so it can't be proven whether the quality standards exist. This is a big problem. The US is by far India's largest drug export market and the FDA is reputed to be the world's toughest drug regulator. And it's not about the US alone; many other countries also follow the FDA's lead in these matters.

Some people claim that the Indian drug industry is being victimised because Indian pharma companies are a big challenge to US drugmakers' profits. This claim was most emphatically put forward by Ranbaxy's old management but then those guys were found to be so ethically challenged that it's hard to take seriously anything they said. It's possible that there's some lobbying to scrutinise India's drug industry rigorously but there's nothing that can be done about that except to ensure that the industry follows the right processes rigorously.

However, our problems are probably deeper. I'll shift gears and say that I've gained a lot of perspective on this problem while managing Value Research over the last two decades and more. What does Value Research have to do with the pharma industry, you might ask?

Over the last quarter of the century, Value Research has established a reputation for being the most-reliable source of data and analysis on the Indian mutual-fund industry. These data are used by a very wide range of organisations and people. Among our customers are global organisations, like Bloomberg, which relay them to practically every financial institution around the world, major Indian banks, media, the fund industry itself, and, of course, the readers of our magazines and websites. Obviously, some of these consumers of our data are powerful corporates who can make a lot of trouble for us if the data are not accurate. At the other end, a casual website user may not even be able to figure out that there's something wrong if the data are not accurate.

But we haven't had any problems like the ones that Indian pharma companies are facing now since our early years. And the reason for that is that we don't have two levels of quality. Internally, we don't say, "These data have to go to Wall Streeters, so let's make them super accurate, but these data just have to be read by ordinary Indians, so we can afford to be a little careless." If we did that, it would have created the culture in which one just needs the minimum quality that one can get away with as long as someone doesn't catch the discrepancy. Eventually, it would have all gone down the drain.

And yet, it's self-evident that Indian pharma suffers from this two-quality syndrome. To supply high-quality drugs to foreign markets, Indian pharma companies have taken the path of keeping the quality of domestic drugs low. As long as this attitude remains, a universal-quality culture cannot take hold. The solution to this problem cannot be limited just to somehow passing American regulatory tests.

It's a sordid business, with reputed companies having one level of quality and process adherence for medicines that you and I take and give to our children, and a different level for rich white people living in foreign countries. What does this tell you about Indian businesses? Make in India, anyone?