MSME pharma units warn of shutdown risk amid cost surge, delayed payments

Indore: MSME pharmaceutical manufacturers have warned that many small drug units in Madhya Pradesh could shut down as supply chains for key raw material remain disrupted due to ongoing tensions in West Asia, while rising input costs and delayed payments from govt agencies continue to strain the sector.Industry representatives said the MSME pharma sector, which supplies a significant share of medicines to govt health corporations, is facing severe liquidity pressure as input costs rise while payments remain stuck for months, raising concerns about potential shortages of essential medicines.The MP Small and Medium Drug Manufacturing Association said nearly 90 percent of supplies to central and state health corporations are fulfilled by MSME manufacturers.The association president Dr Darshan Kataria said, "With rising raw material prices and delayed payments, many units are struggling to sustain operations. Around 75 percent of the raw material used in drug manufacturing are imported, and recent price spikes have sharply increased production costs."Industry members said units supplying medicines under public tenders face penalties or blacklisting if deliveries are delayed, even when delays are linked to global supply disruptions.The association secreatry Ajay Singh Dassundi said many manufacturers are now caught between contractual penalties and financial losses. "We are urging the govt to release pending payments immediately and provide flexibility in supply timeline. If the current situation continues, a large number of MSME units may be forced to shut down within the next two to three months," he said.The association has sought a 60-day extension in supply timelines, a temporary waiver of penalties on delayed deliveries, and immediate release of pending payments. It has also proposed short-term tenders for life-saving medicines and relief measures for domestic manufacturers.The association has urged both the central and state govts to introduce immediate support measures to stabilise the sector and ensure uninterrupted supply of essential medicines.