As India’s pharmaceutical sector gears up for improved Good Manufacturing Practice (GMP) standards, almost 40% of the country’s medium and small pharma companies face a high risk of closing down.
The new regulations, set to take effect by December-end for companies with an annual turnover below Rs 250 crore, require significant investments in building upgrades and documentation improvements, making limitations for many smaller players.
With 10,500 manufacturing units national, of which over 8,000 are categorized as medium, small, or micro companies (MSMEs), specialists alert that up to 30-40% could struggle to comply with the new requirements. These units face operating shutdowns if they cannot fulfill standards that align domestic manufacturing techniques with global quality standards.
The regulations demand strict documentation to ensure traceability in production and testing, but compliance requires infrastructure advancements and a skilled workforce. “The key challenge is the documentation, besides the building upgrades, for which we need additional skilled manpower,” demonstrated Jatish Sheth, Secretary General of the Confederation of Indian Pharmaceutical Industry (CIPI). “The enterprise faces a 25-30% attrition rate, making it difficult to keep the skilled workforce required for these changes.”
The Indian Drugs Manufacturers Association (IDMA) and other pharma organizations have requested a phased implementation timeline of at least one to two years, highlighting economic, technical, and personnel obstacles. “We’ve presented our concerns to the Central Drugs Standard Control Organisation (CDSCO) and are awaiting their reply,” said Viranchi Shah, National President of IDMA. “Without additional time, many units could exit the market.”
In response, CDSCO has been working with industry organizations to support MSMEs through training programs aimed at enhancing compliance readiness. Shah shared that IDMA, in partnership with CDSCO, has launched sessions across key pharma hubs like Hyderabad, Indore, Baddi, and Daman. “We’re bringing in experts to work with companies, while state drug controllers offer technological support to plants.”
The government presented the revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS) in March, which provides financial incentives of up to Rs 2 crore for technical upgrades. However, the program’s rate has been slower than expected. “Although the government offers financial aid, the disbursement rate needs progress,” noted a senior member of a pharma association.
Yet the deadline extension remains under discussion. A government insider mentioned concerns that an extension may inadvertently help less serious parties. “There are genuine companies committed to upgrading but facing burdens. A review of the timeline is necessary to support such companies without enabling those unwilling to invest in quality advancements,” Shah added.
Once executed, the modified GMP norms are expected to enhance the quality and traceability of Indian pharmaceuticals, helping the country better meet global criteria. “This move will distinguish serious manufacturers from others,” said Sandeep Jain, Managing Director of Akums Drugs & Pharmaceuticals. “Large players and contract manufacturers have been GMP compliant for years, pushed by the demand for quality drugs. But smaller companies urgently need funds for equipment, air and water systems, and skilled labor.”
The pharmaceutical industry awaits the CDSCO’s judgment on the extension proposal. For India’s MSME sector, the outcome could determine the survival of many small and medium-sized manufacturers in an increasingly competitive global market.
