With excess capacity, India lifts restrictions on exports of medicines made from Paracetamol

According to Krishna Prasad Chigurpati, the chairman and managing director of Granules, India produces 40 percent of the world’s Paracetamol requirements. However, India utilises only 10-15 percent of this 40 percent, hence has enough capacity to export the remaining which it was doing earlier.

For Granules, Paracetamol is an important product and it comprises of 25-30 percent of its total production, both the finished dosage formulation and the API. Due to the export restrictions, the company has had inventories piling up in the past month.

In fact, industry sources say dispatches having taken place for the past 15 days and as a result, capacity utilisation has reduced. However, the company expects to liquidate inventory due to lifting of restrictions on exports of the finished drug.

Another company that benefits from the lifting of ban is Indoco Remedies. Paracetamol, the finished drug comprises of 18 to 20 percent of their total export basket. Exports for the company are expected to be around 30 percent of the company’s total sales. Indoco mainly exports Paracetamol to the UK market and is expected to be one of the beneficiaries of this export easing.

In fact, the company earlier this week sent out the first shipment of close to 12 lakh Paracetamol tablets to the UK. It was airlifted on April 12 from Goa. The permission was granted by the government for a total shipment of 4.48 crore tablets. The remaining quantity as per the company is ready for shipment.

When it comes to APIs for paracetamol, the industry expects the government to eventually ease restrictions. One of the reasons why the government might not be doing so is due to fear of a shortage or further spike in prices according to industry heads.

Paracetamol API prices have already climbed by 30-40 percent since the start of the coronavirus crisis and one of the reasons has been the increase in raw material prices to manufacture the API. India procures a large part of the Key Starting Material (KSMs) for Paracetamol APIs from China according to exports. These KSMs saw a spike of 20-25 percent, which have not climbed further.