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Small-scale drug manufacturers in India confront potential shutdowns as regulator enforces stricter quality norms

With a looming deadline to comply with the updated Schedule M standards, thousands of micro, small and medium pharma units (MSMEs) face closure—raising concerns over job losses and medicine shortages.

• By Newsdesk
• New Delhi
• Nov 14, 2025

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India’s pharmaceutical regulator, the Central Drug Standard Control Organisation (CDSCO), has intensified inspections across drug-manufacturing facilities, directing state controllers to assess compliance with the revised Schedule M standards. Industry insiders warn that nearly 5,000 micro, small and medium-scale pharma units may be forced to shut down if they fail to meet the upgraded Good Manufacturing Practices (GMP) requirements.

The revised Schedule M norms, introduced in January 2022, impose significantly stricter standards for drug production. Larger companies with annual turnover above ₹250 crore were required to comply from July 2023, while MSMEs were given time until January this year, later extended to December 31. Now, with the deadline approaching, smaller manufacturers say the compliance burden is overwhelming without financial or infrastructural support.

In a circular dated November 7, CDSCO instructed state drug regulators to file monthly reports detailing facility inspections and the actions taken against non-compliant manufacturers. The move signals the regulator’s push to enforce uniform quality benchmarks across the sector.

Industry bodies representing MSMEs have raised alarm over the potential fallout. Rajesh Gupta, who leads the pharma committee of a national small-industry association and heads the Himachal Drug Manufacturers Association in Baddi, cautioned that the regulatory pressure could trigger heavy job losses and disrupt local economies. He stressed that these units were instrumental during the Covid-19 pandemic and argued that the government should focus on helping them upgrade rather than penalising them.

Several MSME firms have submitted “gap analysis” reports, outlining deficiencies in their facilities and committing to begin upgrades within three months. The regulator has allowed companies to request extensions by presenting detailed action plans with timelines and justifications. However, those unable to comply risk suspension of their manufacturing licences or shutdowns, raising concerns about potential short-term shortages of essential drugs.

The situation underscores a delicate balance: ensuring global-standard drug quality while safeguarding the viability of thousands of small-scale manufacturers that form the backbone of India’s domestic pharmaceutical supply.