The Chinese government is likely to suspend the export of all the hazardous substances including pharmaceutical chemicals for the two months starting from mid July to mid September, in connection with Olympics 2008. The decision is likely to create a major crisis situation for the Indian pharmaceutical industry.

According to industry sources, the Chinese government's decision is to suspend the movement of any hazardous substance, including pharmaceutical chemicals, in the region from one month prior to the beginning of Olympics. The restriction is expected to last till 15 days after the Olympics. For the next two months, therefore, the companies in India would find it difficult to import any chemical substances including bulk drugs and intermediates from China.

"This will have a double effect on the Indian pharmaceutical industry, as almost 20 per cent of the bulk drugs and around 70 to 80 per cent of the intermediates in the country are imported from China. Most of the companies are now collecting stocks as much as they can with their financial and storage capacity to meet the situation. The price increase of Chinese raw materials is already posing a problem for those who have to buy large quantities," S V Veeramani, chairman-SME Committee, IDMA and chairman-SSI Committee, Pharmexcil told Pharmabiz.

However, the sources informed that the restriction is only around Beijing, where the Olympics 2008 is to be held, and the supplies from other parts of China will be continued though the prices will be very high. The prices are expected to shoot up with increase in demand as the companies from Beijing and its outskirts cannot supply products to its customers.

"We heard about such a restriction coming and we are in talks with the Union Chemicals Ministry. We are also considering to discuss the issue with the Chinese Embassy, if such a restriction is imposed," said P V Appaji, executive director, Pharmexcil informed.

The prices of active pharmaceutical ingredients (APIs) and intermediates imported from China have already gone up from 50 per cent to 200 per cent in the last couple of months. Further, the Chinese government has ordered closure of several major API manufacturers as the environment rules were made stringent prior to organising Olympics.