Pharma Under Pressure: How Import Reliance is Weakening Bangladesh’s Pharmaceutical Industry
Bangladesh’s pharmaceutical industry has earned global recognition for producing affordable generic medicines and exporting to over 150 countries. However, behind this success story lies a critical weakness: heavy reliance on imported raw materials, especially Active Pharmaceutical Ingredients (APIs). This dependence makes the industry vulnerable to global supply chain disruptions, currency volatility, and geopolitical risks—threatening the sustainability of a vital sector for public health and economic growth.
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| A cartoon showing a Bangladeshi pharmaceutical factory tied to shipping containers labeled 'China' and 'India', symbolizing overreliance on foreign raw materials. |
Source: © Shahriar Shovon 2025
Overview of Bangladesh’s Pharmaceutical Sector
The pharmaceutical industry in Bangladesh is the second-largest contributor to the national revenue and meets 97% of domestic demand for medicines. Major companies like Square, Beximco, and Incepta dominate the market. Yet, approximately 85% of raw materials, especially APIs, are still imported—primarily from China, India, and a few European countries.
Why Heavy Import Reliance Is a Problem- Supply Chain Disruptions
The COVID-19 pandemic and recent global shipping bottlenecks have shown how overdependence on imports can lead to production halts and medicine shortages.
- Currency Devaluation
The weakening of the Bangladeshi Taka against the US Dollar makes importing APIs significantly more expensive, increasing production costs and putting pressure on retail medicine prices.
- Geopolitical Instability
Trade tensions or export restrictions from API-exporting countries (like India’s temporary ban during COVID-19) can severely disrupt production lines in Bangladesh.
- Lack of Strategic Autonomy
The overreliance on foreign sources limits Bangladesh’s capacity to respond independently during public health emergencies.
- Supply Chain Disruptions
The COVID-19 pandemic and recent global shipping bottlenecks have shown how overdependence on imports can lead to production halts and medicine shortages. - Currency Devaluation
The weakening of the Bangladeshi Taka against the US Dollar makes importing APIs significantly more expensive, increasing production costs and putting pressure on retail medicine prices. - Geopolitical Instability
Trade tensions or export restrictions from API-exporting countries (like India’s temporary ban during COVID-19) can severely disrupt production lines in Bangladesh. - Lack of Strategic Autonomy
The overreliance on foreign sources limits Bangladesh’s capacity to respond independently during public health emergencies.
Figure: Bangladesh’s API Import Dependency (2025)
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| A pie chart showing 85% of APIs imported—60% from China, 20% from India, and 5% from other countries, with only 15% sourced domestically. |
Current Initiatives Toward Self-Reliance
- API Industrial Park in Munshiganj:
The government has initiated a specialized API park to encourage domestic API production. Though progress has been slower than expected, it remains a critical step toward import substitution.
- Policy Support & Incentives:
The government offers tax holidays and cash incentives for firms investing in local API manufacturing.
- Research & Development Encouragement:
Some private firms are beginning to invest in R&D for biosimilars and complex generics, but the scale is still limited.
The government has initiated a specialized API park to encourage domestic API production. Though progress has been slower than expected, it remains a critical step toward import substitution.
The government offers tax holidays and cash incentives for firms investing in local API manufacturing.
Some private firms are beginning to invest in R&D for biosimilars and complex generics, but the scale is still limited.
Figure: “Import Dependency Trap” – Cartoon Illustration
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A cartoon showing a Bangladeshi pharmaceutical factory tied to shipping containers labeled 'China' and 'India', symbolizing overreliance on foreign raw materials. |
Source: © Shahriar Shovon 2025
Recommendations for Reducing Import Dependence
- Fast-track API Park Development
Speed up infrastructure, utility services, and regulatory clearances in the Munshiganj API Park.
- Technology Transfer & Joint Ventures
Encourage joint ventures with global pharmaceutical firms for API production and knowledge sharing.
- Subsidize Local R&D and Raw Material Production
Provide grants and low-interest loans to firms investing in local raw material innovation.
- Diversify Import Sources
Explore alternative suppliers from Southeast Asia, Latin America, and Europe to reduce geopolitical risks.
- Regulatory Strengthening
Enhance the capabilities of the Directorate General of Drug Administration (DGDA) to ensure quality and compliance for locally produced APIs.
Speed up infrastructure, utility services, and regulatory clearances in the Munshiganj API Park.
Encourage joint ventures with global pharmaceutical firms for API production and knowledge sharing.
Provide grants and low-interest loans to firms investing in local raw material innovation.
Explore alternative suppliers from Southeast Asia, Latin America, and Europe to reduce geopolitical risks.
Enhance the capabilities of the Directorate General of Drug Administration (DGDA) to ensure quality and compliance for locally produced APIs.
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