Government Steps In: Urgent Action to Rescue Pharma Supply Chain Crisis Triggered by LPG Diversion
New Delhi’s recent government initiative to redirect petrochemical feedstocks towards domestic LPG supply, following a cooking gas shortage linked to the West Asia conflict, has nearly destabilized India’s pharmaceutical sector. This move resulted in a significant reduction of isopropyl alcohol (IPA) production, a vital solvent for essential and life-saving medicines, prompting leading drug manufacturers to issue warnings about potential medicine supply disruptions, as revealed in documents reviewed by Mint.
Fortunately, the crisis was mitigated after the Centre intervened on April 1, implementing emergency measures to ensure a minimum allocation of critical refinery inputs like propylene and propane to Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) and other suppliers. These measures prioritize pharmaceutical, food, and petrochemical sectors, although the need for LPG production continues to take precedence.
To further address the crisis, the Department of Chemicals & Petrochemicals has initiated an emergency audit of 11 crucial chemicals used in manufacturing essential medicines, including ethanol, acetone, aniline, and para-aminophenol-the key component for producing paracetamol. Pharmaceutical firms have been instructed to report their current stock levels and suggest alternatives, signaling a proactive approach to safeguard the industry.
Hari Kiran Chereddi, CEO of HRV Pharma, emphasized that the situation reflects a longstanding structural vulnerability in India’s reliance on concentrated petrochemical and natural gas supplies. He cautioned that any supply disruption transcends business concerns, morphing into a public health crisis, given that these solvents are foundational to antibiotics, analgesics, and other critical medications.
Significantly, signs of stabilization have begun to appear. A representative from Zydus Lifesciences stated that while there was widespread concern in early March, current IPA sourcing has resumed normal operations, ensuring no disruptions in the production or supply of pharmaceutical formulations across its manufacturing facilities.
Prominent pharmaceutical companies such as Serum Institute of India and Sun Pharmaceutical have urgently communicated with the Prime Minister’s Office. Their warnings underscored the risks posed by deficiencies in IPA supply, stressing its critical role in producing essential medical formulations vital for hospitals and emergency care. DFPCL indicated to the government that a staggering 75% of IPA consumption in India supports the pharmaceutical sector, signaling that any continued disruption would severely impact essential medicine availability.
Raghunath Kelkar, president of industrial chemicals at DFPCL, assured that upon restoration of feedstock supplies, their IPA production would prioritize the pharmaceutical industry to prevent a national shortage of life-saving medicines. He noted that maintaining minimum operational capacity is crucial to meet pharmacopoeia specifications, as imported alternatives often lack the necessary purity and traceability.
This crisis originated from a governmental directive aimed at addressing a supply shortage of domestic cooking gas, which inadvertently stifled propylene supplies, a key ingredient for IPA production, bringing local solvent production to a near halt. Indian manufacturers fulfill all IPA requirements, highlighting the disruption’s potential impact on a pharmaceutical landscape characterized by a $50 billion market, reinforcing India’s position as a global leader in generic medicine and vaccine production.
This situation has also reverberated through the broader chemical supply chain, with companies like Manali Petrochemical declaring force majeure due to the halting of propylene supplies. Compounding challenges come from rising input costs, with critical feedstocks such as benzene and ammonia seeing sharp price increases, further straining the pharmaceutical and agricultural sectors.
As the pharmaceutical industry works to navigate these challenges, stakeholders are keenly aware of the intricate interplay between petrochemical supplies and public health response capabilities in India.
Original Source: https://www.livemint.com/news/govt-steps-in-after-lpg-diversion-triggers-near-crisis-in-pharma-supply-chain-medicines-11775217574290.html
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Publish Date: 2026-04-04 05:40:00
