The Union health ministry had made registration of all imports of drugs and pharmaceuticals into the country compulsory from April 1, 2003. Absence of a registration system for importing bulk drugs and formulations has been resulting in import of large quantities of substandard drug materials at very low prices. Free flows of such imports have been not only hurting the domestic industry but was also helping the ongoing spurious drugs activity in India. One of the key reasons for the decline of Indian bulk drug industry in the nineties was this dumping of bulk drugs at very low prices by the Chinese suppliers. Even imposition of anti dumping duty on such imports by the commerce ministry has not been of much help. Introduction of import registration rules by the health ministry had thus two clear objectives. First, to check the import of bulk drugs at artificially low prices. Secondly, bring an end to the inflow of poor quality drug materials through a scrutiny of import applications and inspection of manufacturing sites of exporters. For one year since 2003, there has been a decline in the import of substandard drugs into the country. A good number of applications for sourcing bulk drugs from China and other countries used to get rejected by the office of DCGI. But, the number of registrations for import of bulk drugs and intermediates from China has been on rise of late. With this trend, there is an increased availability of inferior quality of imported drugs in the market today. The case of seizure of stocks of several substandard bulk drugs from some formulators in Gujarat in November last year clearly indicated the leakages in the system. The state Food and Drug Control Administration found that most of these products originated from China. The drugs in question had also import registration clearances from the office of the DCGI. How import clearances were given to such products by the office of DCGI is still not known. Large imports of duty free caffeine into the country by some operators in Mumbai claiming to be under advance licence route is another instance of scuttling the registration system of the government. Imported caffeine, used in the pharmaceuticals and soft drink industries, are being diverted into the domestic market hitting the local units. It is to be recalled that the Commerce ministry had imposed anti dumping duty in the case of caffeine since 2001 to curb dumping from China and Spain. Now for importing bulk drugs or intermediates under advance licence, there is no need of registration. This is wrong. The rules have to be modified to make registration compulsory for all kinds of imports. A system should also be evolved to effectively check the diversion of materials imported under advance licences into the domestic market. DCGI office should also start the practice of undertaking inspection of the foreign manufacturing facilities before import registrations are granted. DCGI is empowered to undertake such inspections under the rules. Unless these deficiencies are rectified, drug import registration rules will remain a farce only.