India considers energy and defence strategic priorities, yet its heavy reliance on China for medicines, APIs, and medical devices exposes a critical gap in health security. The COVID-19 pandemic made this dependency impossible to ignore, revealing structural vulnerabilities in the medical supply chain of the so-called “pharmacy of the world.”
A Strategic Vulnerability Beneath India’s Pharma Success
India supplies 20% of global generic medicines and over 60% of global vaccines, but this achievement masks a troubling reality: pharmaceutical production depends heavily on Chinese inputs.
When Chinese factories shut down in early 2020, India’s drug supply chains faltered. In March that year, the government restricted exports of 26 essential medicines, including paracetamol and antibiotics, due to shortages of key starting materials (KSMs) from China. This exposed the weakness of “interdependent self-reliance,” where domestic pharmaceutical strength still hinges on foreign suppliers.
China’s Overwhelming Dominance in Health Inputs
China presence in India medical supply chain stretches across the entire ecosystem — from raw chemicals to high-tech medical equipment.
Dependence on APIs and Raw Materials
- About 67.5% of raw materials for drug formulations came from China in 2018.
- By 2024, 87% of India’s imported antibiotic ingredients by value were sourced from China — up from 60% in the mid-2000s.
- For certain antibiotics like erythromycin, China supplies over 97.7% of India’s needs.
This level of concentration represents near-monopoly conditions.
Medical Devices Also Rely on China
India’s US$11+ billion medical device market imports more than 70% of its requirements — and China has become the largest single source.
Chinese imports include:
- ICU monitors
- Imaging machine components
- Diagnostics
- Disposables
- Ventilator parts
Even upstream technologies — semiconductors, rare-earth magnets for MRI machines, and specialised sensors — tie India’s hospitals to Chinese supply chains. Nearly 97% of silicon wafers used in many medical devices come from China.
Supply Chain Risks Become Security Threats
India’s dependence transforms routine economic risks into strategic vulnerabilities.
1. Risk of Supply Disruptions
Any trade interruption, whether due to pandemics or geopolitical tensions, can directly endanger public health.
2. Antimicrobial Resistance (AMR)
Shortages of first-line antibiotics force doctors to prescribe broader-spectrum alternatives. This accelerates AMR — a silent global health crisis.
3. Geopolitical Chokepoints
China could, in theory, use its dominance in APIs and medical devices as leverage during political confrontations. While this remains a hypothetical scenario, the risk is significant enough to warrant strategic planning.
Government Response: Making Medical Supplies a Strategic Asset
India has begun treating critical health imports as strategically important.
Production Linked Incentive (PLI) Scheme
Launched in 2020, the PLI scheme invested INR 6,940 crores to boost domestic production of:
- APIs
- KSMs
- Medical devices
Achievements so far:
- 32 API/KSM projects completed
- 56,679 MT in added annual capacity
- 16 more projects underway
Some bulk drugs previously 95% imported, like certain fermentative antibiotics, are now being produced domestically on a pilot scale.
National Medical Devices Policy (2023)
This policy pushes for indigenous manufacturing of:
- Imaging equipment
- Implants
- Diagnostic kits
- Wearables
India is also exploring a “China+1” strategy, seeking alternative suppliers to reduce single-country dependence.
Remaining Gaps in India’s Health Security Strategy
Despite progress, several weaknesses persist:
Lack of a Unified Health Security Dashboard
Unlike oil or food, India has no central, real-time system tracking critical medical dependencies.
Procurement Practices Prioritise Cost Over Security
Hospitals frequently choose the lowest-cost bidder — usually Chinese products — unintentionally reinforcing dependence.
Limited Global Coordination
India, as a major voice in the Global South, could lead efforts in joint procurement or co-production of essential medical goods with Africa, Latin America, and Southeast Asia.
Toward a Resilient Medical Supply Chain
To secure its health future, India should adopt a comprehensive national health security strategy.
1. Create a National Health Security List
Identify essential:
- Medicines and APIs
- Vaccines
- Medical devices
- Digital health components
These items must have diversified sourcing — at least 2–3 dependable suppliers.
2. Align Policies With Security Priorities
Critical items should be exempt from lowest-bidder procurement rules and supported through fiscal incentives.
3. Build Strategic Stockpiles
Just like the petroleum reserve, India needs buffer stocks of:
- Anti-infective APIs
- Diagnostics
- Personal protective equipment
4. Lead Global Health Resilience Initiatives
India can help shape international norms on:
- Restricting export bans during crises
- Cooperative bulk buying
- Information-sharing on shortages
A Long Road Ahead; But Critical for National Security
China’s outsized role in India’s medical supply chains will not end immediately — nor does it have to. What matters is whether India can transform the current dependency from a structural vulnerability into a manageable component of global trade.
As health becomes inseparable from national security, India must fortify its medical supply lines. The next crisis — pandemic, geopolitical shock, or global shortage — will test how effectively India has prepared.
