The recent explosion at Sigachi Pharma's manufacturing unit near Hyderabad, India, has cast a harsh light on the regulatory oversight of the nation's booming pharmaceutical industry. The incident, which occurred on June 30, 2025, resulted in the tragic loss of over 40 lives and left dozens injured, predominantly migrant workers. The blast has triggered investigations into potential safety violations and exposed recurring failures in safety protocols within Indian factories.
Sigachi Industries, a prominent manufacturer of microcrystalline cellulose used in pharmaceuticals, cosmetics, and food products, stated that the explosion was not due to a reactor blast but possibly caused by overheating. However, families of the victims allege safety violations, prompting authorities to launch an investigation. A five-member committee has been formed to determine the cause of the blast and examine the company's employment of low-wage workers in hazardous operations.
The incident has raised serious questions about the adequacy of safety measures and government oversight in the pharmaceutical sector. Preliminary investigations suggest the factory may have been operating without a fire No Objection Certificate (NOC) and lacked official fire clearance due to legal loopholes. The factory, built in 1989, had minimal safety checks, and its fire audit was based solely on internal company standards, rather than mandated official ones.
India's pharmaceutical industry, the world's third-largest by volume, has been under increasing scrutiny regarding its regulatory framework. While the nation aims to be a global leader in providing cost-effective, high-quality drugs, incidents like the Sigachi Pharma explosion underscore the urgent need for stricter enforcement of safety standards and improved accountability.
The government has taken steps to strengthen drug manufacturing practices, including implementing revised Schedule M norms under the Drugs and Cosmetics Rules, 1945, effective January 1, 2025. These norms outline updated Good Manufacturing Practices (GMP) for pharmaceutical products, encompassing standards for premises, plants, equipment, quality reviews, risk management, and pharmaceutical quality systems.
However, these changes pose challenges for Micro, Small, and Medium Enterprises (MSMEs) within the pharmaceutical sector, many of which are struggling with the high costs of infrastructure upgrades and machinery procurement. While industry bodies have requested extensions to allow sufficient time for adjustments, the government has emphasized that companies must comply or face action.
In response to the Sigachi disaster, the government's five-member committee has proposed measures such as mandatory real-time monitoring systems for chemical processes, stricter safety audits with penalties for non-compliance, and whistleblower protections. These measures aim to create market entry barriers for competitors lagging in safety protocols.
The incident serves as a wake-up call, highlighting the critical need for a regulatory overhaul to redefine pharmaceutical safety and investment strategies. Investors are increasingly prioritizing Environmental, Social, and Governance (ESG) criteria, favoring firms with robust safety protocols and a demonstrated commitment to compliance.
Moving forward, a multi-faceted approach is essential to prevent future tragedies. This includes stricter enforcement of existing regulations, increased investment in safety infrastructure, and greater transparency and accountability across the pharmaceutical supply chain. The government, industry, and stakeholders must collaborate to ensure that India's pharmaceutical sector can maintain its global competitiveness while prioritizing the safety and well-being of its workforce and the public.
