Pharma: An Emerging Link in China-India Ties

The last 70 years of China-India interaction is illuminated by stories such as that of Dr. Dwarkanath Shantaram Kotnis. Kotnis volunteered in 1938 to look after the sick and wounded in China to support the Chinese People’s War of Resistance against Japanese Aggression. Learning the Chinese language quickly, Kotnis was very friendly with his patients; he fell in love with Chinese nurse Guo Qinglan and married her, adopting China as his second home. His journey, however, ended rather abruptly as he died of epileptic seizures at the age of 32 on December 9, 1942, barely months after his son, named Yinhua (meaning “India-China”), was born.

This story began with a request from Zhu De, then commander-in-chief of the Eighth Route Army led by the Communist Party of China (CPC), to India’s Jawaharlal Nehru for medico assistance in the fight against Japanese aggression. India raised funds and sent a team of five doctors to China including Kotnis. Nehru himself also visited China in 1939 in the midst of the Chinese People’s War of Resistance against Japanese Aggression.

Fast forward to the year 2020, the spread of COVID-19 seems pregnant with similar possibilities for such stories to emerge in the next 70 years of China-India ties. At its very outset, this pandemic has not only magnified the focus on health being a shared responsibility of humankind, but also revealed this sector as an emerging link between China and India, which are home to nearly 40 percent of the world’s population. Now, until the vaccine against COVID-19 has been successfully produced, which seems at least a year away, this acute burgeoning demand for medicos, medicines and medical equipment worldwide will see the expanding connection of health-related production and exports of China and India emerge as the strongest source of their cooperation and competition.

It is a commonplace that China stands among the world’s top producers of medical devices and India is the world’s major supplier of generic medicines. Together they play the role of vanguards for fledgling health sectors in several developing and least-developed nations, including their own health services. India has also emerged as one of the most preferred destinations for medical tourism. China has been providing medical supplies to over 150 countries and international organizations amid the COVID-19 pandemic, and India has also been a major supplier of nurses and doctors, as well as medicines and active pharmaceutical ingredients (APIs), for Gulf states, Japan, the European Union and the United States.

What most aptly underlines their expanding ties is the fact that China accounts for 20 percent of the global output of APIs and India imports about 70 percent of the raw materials for its drug manufacturing from China. Lately, China has also become the most preferred destination for low-cost medical education for thousands of Indian students. Anti-immigration policies in the West have only further pushed this traffic to China.

Other than enabling India’s medical expertise and manufacturing to make it a global life saver, China’s inputs have also been financially enriching: India has seen a double-digit pharmaceutical export growth in recent years. According to the Pharmaceutical Exports Promotion Council, a body under India’s Ministry of Commerce and Industry, India’s exports of bulk drugs and intermediates stood at US$3.9 billion in the 2019 fiscal year, up by 10.5 percent over the previous year. These statistics, of course, do not tell the whole story of India’s real pickings—India earns its reputation as a “global pharmacy” with its cheap generic medicine. In terms of volume, India’s pharmaceutical industry stood as the third largest in the world, and in terms of value, it held the 13th position.

The story is not all milk and honey. The COVID-19 pandemic showed how lockdowns in China can create hiccups for India’s imports of Chinese APIs. India has to deal with ever-increasing demand for its generic medicines while facing shortage of API supplies and even political pressure from the West. This high demand also resulted from the World Health Organization endorsing India’s Paracetamol and Hydroxychroloqine as treatments for COVID-19, which made the two drugs popular commodities worldwide. Initially, like many other nations, India imposed a ban on medical exports, but it had to be lifted, and soon India resumed supplying health materials.

This rollercoaster of highs and lows has triggered some rethinking in New Delhi. To some extent, this is part of global debates on decoupling and indigenization which also has its lessons for India’s healthcare-related education, training and manufacturing. In the face of all this, the Indian government identified the priority list of 53 key starting materials and APIs, approved US$1.3 billion for providing incentives and capital subsidies to boost their domestic manufacturing and a plan for setting up three industrial parks for bulk drug production.

China has not been sitting idle. In recent years, China has made strides in producing advanced medical equipment and precision instrumentation as well as expanding production of both drugs and APIs, which challenges the United States and Germany’s monopolies in high-value medical products and services. What makes things promising for China and India is this expanding worldwide focus on health, which means there will be more than sufficient opportunities for both New Delhi and Beijing. Both sides can maximize their advantages from this windfall and expand the avenues of their cooperation.

The author is chairman of the Centre for International Politics, Organization and Disarmament (CIPOD), School of International Studies, Jawaharlal Nehru University in New Delhi.