New Delhi: Curbs on the supply of liquefied petroleum gas and petrochemicals amid the ongoing West Asia conflict are beginning to affect India’s pharmaceutical and medical device industry, disrupting the manufacturing of widely used medicines such as paracetamol as well as products including gloves and syringes.
Industry bodies and policy think tanks have written to the Commerce Ministry, the Petroleum and Natural Gas Ministry, and the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilisers, seeking exemptions similar to those granted during the Covid pandemic. They have urged the government to allow uninterrupted manufacturing by treating the sector as an essential industry.
Earlier this week, the Commerce Ministry held a meeting with industry representatives to assess the sector’s dependence on liquefied petroleum gas and explore possible alternatives, according to people familiar with the discussions.
The Indian Pharmaceutical Association, the Indian Drug Manufacturers Association, and the Federation of Pharma Entrepreneurs have submitted representations to the ministries, warning that any disruption or rationing of liquefied petroleum gas and piped natural gas supply would immediately affect the production of critical medicines for both the domestic and global markets. These gases are used in several key processes in pharmaceutical manufacturing.
An industry expert, speaking on condition of anonymity, said liquefied petroleum gas is required for multiple manufacturing operations such as boilers, granulation and sterilisation. The expert noted that most micro, small and medium enterprises in the pharmaceutical sector rely entirely on liquefied petroleum gas or piped natural gas, while larger companies may have limited capacity to switch to electricity for certain processes.
According to the expert, the impact on manufacturing is likely to be immediate, although shortages in the market may become visible only after some time. Most companies maintain stocks for around 15 to 30 days, while larger firms sometimes keep reserves for three to six months. However, if production does not continue, shortages are likely to appear within a few months.
A government directive to curtail the supply of certain petrochemicals in favour of increasing production for household cooking gas has also affected the manufacture of key medicines and medical equipment. One of the most pressing concerns is the shortage of refinery-grade propylene, which is required to produce pharmacopoeia-grade isopropyl alcohol, a substance widely used for coating in several common medicines.
The refinery of Reliance Industries in Jamnagar, which supplies refinery-grade propylene, has already implemented the government directive, cutting off supply to most isopropyl alcohol manufacturers. Importing the chemical is also unlikely, as a Singapore-based supplier has invoked force majeure on its propylene supply.
According to a representation submitted to the Department of Pharmaceuticals by the Centre for Domestic Economy Policy Research, nearly 200 manufacturers may have to halt production within the next seven to ten days, or by the end of the month at the latest, once their existing stocks are exhausted.
Dr Jaijit Bhattacharya, president of the Centre for Domestic Economy Policy Research, said pharmaceutical-grade isopropyl alcohol cannot easily be imported because it is highly susceptible to contamination. He added that the gain in liquefied petroleum gas supply from diverting propylene is minimal compared with the potential damage to the pharmaceutical sector.
Diverting all propylene used for isopropyl alcohol production would increase the country’s monthly liquefied petroleum gas supply by only 0.36 per cent, but it would completely shut down isopropyl alcohol manufacturing. This, in turn, would disrupt the production of medicines across at least 14 therapeutic categories listed in the National List of Essential Medicines, he said.
The organisation also warned that disruptions in the supply of benzene, and in other materials whose synthesis depends on it, are already affecting the manufacturing of several active pharmaceutical ingredients, including paracetamol, one of the most commonly used fever medicines.
Propylene and benzene are also essential for producing medical products such as gloves, personal protective equipment kits and syringes. Industry sources said the manufacturing of these items would also be affected if petrochemical supplies continue to remain constrained.