(This story originally appeared in on Nov 26, 2014)

NEW DELHI: India runs the risk of a severe shortage of medicines because of its over dependence on China for sourcing raw material for drugs, national security adviser ( NSA Ajit Doval has warned, TOI has learnt.According to the NSA, India should take immediate concrete steps to create adequate infrastructure to become self-sufficient for manufacturing medicines which are essential in nature."The national security adviser had highlighted concerns related to overdependence on China for supply of active pharmaceutical ingredient (API). Following this, a core committee of experts was formed under the health ministry and a policy would soon be finalized to boost domestic manufacturing of bulk drugs used in medicine formulations," a senior official in the government privy to the developments, told TOI.Currently, India imports over 80-85% of API, or raw material used in medicines, from China. This is crucial because any kind of tension or adverse circumstances between the two countries have potential to lead to a crisis in public health in India. Experts say China has antagonized many of its neighbours in the past and India should take a call based on its economic and strategic relationship with the country.In 2010, the Chinese government had blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles, following tensions between the two countries.Sources said the PMO as well as health ministry had taken cognizance of the issue. To start with, the government is set to roll out a separate policy to revive the domestic API manufacturing industry. "The committee and task force set up by the government for preparing the policy have finalized their recommendations and gone to the PMO," the official said.The proposed policy will address the concerns of bulk drug manufacturing by way of incentives and creating infrastructure through bulk drug parks, etc. The proposal will also evaluate other issues related to anti-dumping duties and environmental clearances.India was once a favoured destination for sourcing low-cost, good quality raw material for manufacturing medicines. However, China has taken over this bulk drug market globally in the past few years by creating huge capacities. Now, while some pharmaceutical companies manufacture selective API for captive usage, most of it is imported from China. The reason is that landed price of API from China in India is 15-20% less than its production cost here, making it more viable for companies to import.The domestic API manufacturing industry, mostly based out of Hyderabad and Ahmedabad , currently accounts for 8-10% of India's Rs 79,000-crore pharmaceutical market. The rest comprises formulations. In 2007, when the total domestic pharma market was around Rs 35,000 crore, APIs accounted for over 15-20%.However, some believe price benefit is just one reason. Concerns such as environmental obstacles and lack of infrastructure dissuade domestic manufacturers. The idea is to facilitate the industry by ensuring adequate power and water supply, providing logistics and helping companies in capacity building to bring down cost of production.