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India's CRDMO sector could grow seven-fold by 2035: BCG

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Sector gains as global firms try to diversify supply chain

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Industry veterans push for more ease of doing business

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Want faster import clearance, more drug warehouses

By Rishika Sadam, Kashish Tandon and Bhanvi Satija

HYDERABAD Feb 27 (Reuters) - India's contract drug

makers have urged the government to remove regulatory hurdles

and grant faster clearance to vital raw material imports at a

time when many global pharmaceutical firms are counting on the

nation to reduce their reliance on China.

India's Contract Research Development and Manufacturing

Organisation (CRDMO) sector is at an inflection point, with the

potential to grow seven-fold to $22 billion-$25 billion by 2035,

according to a report by Boston Consulting Group.

Globally, the market stands at $140 billion-$145 billion.

"The government has to understand that this industry has

potential, if not scale, right now," Krishna Kanumuri, CEO and

managing director at Sai Life Sciences, said at an

event earlier this week.

India's contract drug manufacturers have gained from global

companies' efforts to diversify their supply chain after the

pandemic and a U.S. bill that would prohibit federal contracts

with certain Chinese biotech firms on national security grounds.

However, India's policies are yet to play catch-up.

For instance, prolonged approval times and regulatory

demands tied to certain raw material imports meant Indian firms

often require eight to 15 days to initiate projects, while their

Chinese peers could do it within three days, according to Vikash

Aggarwala, MD and Partner at BCG's healthcare practice.

Industry insiders pushed for more business-friendly policies

in the world's fifth-largest economy, which is heavily dependent

on China for drug-related raw materials.

Piramal Pharma's Chairperson Nandini Piramal

lamented the lack of customs warehouses at the right locations

and related logistics costs, a dearth of cold storage units, and

delays tied to the clearance of certain raw material imports.

"All of those, I think, add more friction to the ease of

doing business," Piramal told Reuters.

Some others highlighted the delay in approvals due to the

lack of a centralized, digital, single-window clearance system.

Syngene's CEO-designate Peter Bains said the

"friction and delay" could be compressed, highlighting it was "a

disadvantage that India has against other jurisdictions".

India's health and finance ministries did not respond to

Reuters requests seeking comment.

The country, which offers cheap labour and a large talent

pool, has already invested over $2.86 billion in the local

biotech industry, according to the BCG report. But industry

insiders are urging for more.

"I would really pitch for a CRDMO park... with policies

where you don't have to go and get permissions from the local

drug controller for making changes, where there are easy export

and import capabilities," Aragen Life Sciences CEO Manni

Kantipudi said.

($1 = 87.3900 Indian rupees)