New regulatory mandates are putting Gujarat’s small pharmaceutical units at risk, potentially leading to widespread job losses and threatening India’s position as a global drug manufacturing hub. Essential medicines, including blood pressure and diabetes drugs as well as common antibiotics, could vanish from the market, raising public health concerns.
MSMEs Face Heavy Losses
India has around 10,500 MSME pharmaceutical units, with roughly 3,000 based in Gujarat. Together, these units supply about 40% of the country’s domestic drugs. Over 30 pharma associations, including the Drug Marketing and Manufacturing Association (DMMA), have appealed to Union Health Minister J P Nadda for urgent intervention.
The most controversial of seven proposed regulatory changes is the requirement for bio-equivalence (BE) studies, even for drugs safely manufactured and used in India for over 20 years.
Amit Thakkar, DMMA president, said: “Each study costs ₹25–50 lakh. Many MSMEs produce a dozen or more formulations, making this a huge financial burden. These studies also require lab and human trials, but we lack sufficient volunteers.”
Threat to Jobs and Industry
DMMA general secretary Vikram Chandwani warned that without regulatory relief, many MSME pharma units could close. “Jobs will disappear, exports will fall, and the future of India’s pharmaceutical industry will be at risk,” he said.
Gujarat accounts for one-third of India’s pharmaceutical turnover and 28% of its exports. Over 90% of the state’s 3,000 pharma units are MSMEs, which have been key to ensuring medicine supply even during crises like the Covid-19 pandemic.
Calls to Ease Regulations
The DMMA has urged the government to stop frequent regulatory notifications that create operational uncertainty and demand high investment. A major concern is the Revised Schedule M (Good Manufacturing Practices), set to take effect January 1, 2026. The expanded requirements, without addressing MSME concerns, could force 4,000–5,000 units to shut down. The association is seeking an extension of the deadline to April 2027 for companies with turnovers under ₹50 crore.
The DMMA also criticised risk-based inspections, which they claim disproportionately target MSMEs, and the practice of shutting plants based on corrective action reports, even when no critical safety issues are found.
Thakkar summed up the sector’s fears: “MSMEs are the backbone of India’s pharmaceutical industry, yet endless regulatory circulars are undermining the government’s Ease of Doing Business agenda. These measures could lead to shortages of affordable medicines, weaken exports, and allow other countries to surpass India in global pharma markets.”