Pharma companies have been heavily depending on China and India for sourcing active pharmaceutical ingredients (APIs) for years. These two countries account for the majority of the world's pharmaceutical supply chain, providing thousands of APIs, intermediates and raw materials for global manufacturers.
However, sourcing business in 2026 is quite different from 10 years ago.
No longer is the focus for procurement teams only on the lowest price. Challenges in the supply chain, regulatory review, quality considerations, and documentation requirements have lead buyers to consider more than just cost comparisons.
It is not an issue of whether India or China provides APIs, since they do both.
Rather, the real issue is:
What is the most economical, compliant, quality, and secure approach?
The answer varies depending on the type of materials that are being bought, where the finished products are being sold, and how much risk in the procurement process an organization is willing to take.
A lot has happened in pharmaceutical procurement in the last couple of years.
Increasing pressure is being placed on manufacturers to ensure that products are of a high quality, but that manufacturing is both cost-effective and subject to appropriate control for regulatory requirements.
During the same period, global supply chains have become more susceptible to disruptions as a result of logistics problems, geopolitical events, raw material shortages, and market fluctuations.
Consequently, procurement teams now consider a number of things when looking at suppliers:
While price is still significant, it's no longer the sole consideration.
Getting this quote for a lower price may actually lead to greater expenses down the road because of the documentation, delay or compliance concerns.
China is still among the biggest manufacturers of chemical intermediates and pharmaceutical raw materials.
The country has developed a robust manufacturing infrastructure to support large-scale API manufacture in several therapeutic areas.
One of the most significant benefits that China enjoys is its scale of manufacturing.
Suppliers may be able to provide a very competitive price for large production volumes, particularly for commodity APIs and intermediates.
China's chemical manufacturing infrastructure is also fairly advanced.
Direct suppliers can be closer to the raw material, intermediates and the various industries which support their production, which can help to increase production efficiency and decrease costs.
This scale might be appealing for procurement teams that deal with high-volume APIs.
Chinese suppliers typically offer products at the same competitive price, especially in the products that cost is a major consideration.
The sourcing process, however, sometimes fails to consider other factors of sourcing that are important in the later stages of procurement, other than manufacturing cost.
India is known as one of the leading pharmaceutical manufacturing hubs of the world.
India is competitive in price, but its image has also been growing beyond that of being a low cost option.
Indian API suppliers are considered good partners by many global pharma organisations for the regulated market products as they have the experience supporting the customer in the markets like the United States, Europe and other highly regulated markets.
Indian manufacturers are usually able to offer a broad range of documentation supports and have deep experience in dealing with international regulatory expectations.
This can streamline the supplier qualification and regulatory review for procurement teams.
The Indian pharmaceutical industry has also made significant investments in manufacturing modernization, Q systems and compliance infrastructure.
Thus, in cases where the APIs are for regulated markets where documentation and audit preparation are important factors, many buyers find Indian suppliers to be appealing.
One of the biggest procurement team pitfalls is evaluating suppliers solely on the basis of the cost per kg.
Quoted price is just one element of procurement cost.
A complete evaluation should encompass:
For example, the one that has a low cost can require additional quality checking, approval process, and documentation process.
There is always a hidden cost that can wipe out any gain realized from the purchase.
This is why procurement teams with experience base their product selection on the total cost of ownership.
In certain cases, Chinese suppliers may be able to provide lower manufacturing expenses.
In other cases, Indian suppliers can achieve efficiencies by developing an improved record keeping system and regulatory preparedness.
It will depend on the type of product and the procurement goals.
Compliance is one of the top things to consider when sourcing pharmaceuticals.
Product quality, supplier qualification and transparency of supply chains remain in focus.
Therefore, procurement teams must have confidence that suppliers can consistently deliver to standards.
There are a number of areas that are typically included:
Good quality systems contribute to a consistent quality of manufacturing and minimize deviation.
During supplier qualification, procurement teams may need a detailed documentation.
To avoid delays in sourcing projects and additional work on the quality team side, the documentation is sometimes missing or incomplete.
The significance of traceability for drug manufacturers has increased over time.
This will allow visibility of raw material, manufacturing process, and batches within the supply chain.
Suppliers with a good quality system will be better equipped to assist customers with audits and regulatory reviews.
Meeting the compliance requirements is now nearly as important as cost to many organizations.
The last few years have thrown a spotlight on the need for supply chain resilience.
If materials cannot be delivered, a low cost supplier will be of little value.
Increasingly, procurement teams consider the following when evaluating:
Consistent supply is the key to being competitive.
Several pharmaceutical companies are willing to pay premium prices when it comes to avoiding production delays.
This has altered the way API buyers evaluate API suppliers.
They are no longer asking "Who is cheapest?," but "Who can support our business reliably over the long-term?
Purchasing from Indian or Chinese suppliers necessitates a definite supplier evaluation process.
Key questions include:
Sometimes answers to these questions can tell more about the suitability of the supplier than price.
A successful procurement team must strive to balance cost, quality, compliance and long term risk management.
It can take time to research and compare suppliers from various countries.
The procurement teams tend to invest lots of time on supplier searches, gathering documentation, running sourcing option analysis and managing RFQs.
Using a bulk API sourcing platform can make this process easier.
Buyers have the ability to access one source of information for suppliers rather than having to rely on separate supplier information, enabling them to discover and compare suppliers.
Benefits include:
This enables the more efficient evaluation of suppliers.
Having a firm grasp on supplier data can be essential for organizations that are looking to obtain APIs from around the world.
The crucial part of pharmaceutical procurement is selecting the appropriate supplier.
ChemDmart enables procurement professionals to source and purchase APIs from API suppliers via a dedicated B2B sourcing and procurement intelligence platform.
ChemDmart offers buyers access to supplier networks, sourcing insights, and RFQ management, facilitating more effective sourcing decisions.
Access to a centralized source of supplier information can enhance transparency and aid procurement decision-making, whether organizations are looking into suppliers in India or elsewhere on the planet.
In a growing complex sourcing environment, visibility is as critical to a buyer as pricing is.
It isn't a contest to see who wins, it's a competition to see who wins the majority.
Siemens' contribution to both countries is a critical role in the global pharmaceutical supply chain, with distinct advantages.
China is still a major supplier of many APIs and intermediates on the scale with competitive pricing.
India provides good regulatory experience, documentation support and already has established relationships with regulated pharmaceutical markets.
In 2026, the smartest way for procurement teams to go about sourcing is not to just pick the lowest cost supplier.
It involves the selection of suppliers that offer the optimal mix of cost efficiency, compliance, quality and supply reliability.
The most successful organisations will be those that look at suppliers in a holistic way and who will make informed sourcing decisions using procurement intelligence.
