The ministry of chemicals and fertilisers is setting up a committee in two weeks to look into the import of bulk drugs from China. The panel will study the damage caused to the country's production capacity.
The committee, likely to be headed by chemicals and fertilisers secretary Satwant Reddy, will also have experts drawn from outside the ministry.
"There have been concerns about the Chinese bulk drug imports, which are forcing domestic manufacturers to shut their units. A committee is being set up to study the quantum and effects of these imports. The details, however, are still being worked out," said a chemicals and petrochemicals official.
The committee would also contemplate a series of economic incentives for bulk drug production in India. However, a ban on imports from China is not an option.
"China has a global monopoly on the bulk drug production, mainly on account of cheap power and labour. Naphtha, which is an important ingredient in the making of many drugs, attracts zero customs duty in China as against 10 percent here," said a sector expert.
Three out of four penicillin G producers - J K Drugs, Torrent and Alembic - have shut their units as Chinese products are available at half the price.
Manufacturers of oxytetracycline, doxycycline, norflox and erthromycin, too, are feeling the heat. While, Nicholas Piramal is scaling down vitamin E production capacity, Ambalal Sarabhai Enterprises is cutting production of vitamin C.