Sun Pharma invests in new manufacturing facility in India amid FDA problems

India’s largest pharmaceutical company by market share is growing its footprint in the Asian country. In a Tuesday stock exchange filing, Sun Pharma announced that the board of directors of its wholly-owned subsidiary Sun Pharma Laboratories Limited has approved an investment of INR 3,000 crores (approximately $332 million) to establish a new formulations manufacturing facility in Madhya Pradesh.

The capital expenditure on the greenfield project is part of the specialty generics company’s broader strategy of boosting production capacity and supporting growth in the worldwide pharmaceutical sector. The Madhya Pradesh facility will create approximately 2,000 jobs — according to a letter of intent signed earlier this year — and is expected to significantly enhance Sun Pharma’s manufacturing capabilities in India.

While Sun Pharma has outperformed the overall market, Nuvama Institutional Equities in a Nov. 24 sector update to investors noted that the company’s current debt “has gone up by INR28bn” due to its acquisition of Checkpoint Therapeutics earlier this year and continues to be at risk from U.S. Most Favored Nation (MFN) drug pricing and potential pharmaceutical tariffs from the Trump administration.

The tariff outlook for Sun Pharma “remains uncertain as it awaits the Section 232 outcome [from the ongoing U.S. Department of Commerce investigation], though the current pause is expected to continue,” according to Nuvama. “With an existing U.S. manufacturing presence, it is evaluating further expansion.”

Sun Pharma has a global manufacturing footprint of 41 facilities across six continents and says it is continuing efforts to improve efficiency and optimize production. The company operates 27 finished dosage manufacturing facilities (12 of which are in India and three in the U.S.) and 14 active pharmaceutical ingredient (API) facilities (nine of which are in India and one in the U.S.) supporting its formulations business by developing strategic APIs.

“Our integrated manufacturing capabilities with both onshore and offshore facilities, enable us to deliver a wide range of dosage forms,” according to Sun Pharma’s latest annual report. “We operate manufacturing facilities in countries including Bangladesh, South Africa, Malaysia, Romania, Egypt, Morocco, Nigeria and Russia, strengthening our supply chain and local manufacturing presence in key regions.”   

However, adherence to current Good Manufacturing Practice (cGMP) standards continues to be a problem for the specialty generic company.  

Lack of cGMP compliance

In its annual report, Sun Pharma disclosed that the company’s generics business in the U.S. has been “adversely affected” by ongoing FDA compliance-related issues at three of its Indian manufacturing facilities, including serious violations of cGMP.  

In September 2025, Sun Pharma announced that following an FDA inspection in June at its troubled Halol factory in Gujarat, India — which resulted in the issuance of a Form-483, with eight observations — the regulatory agency classified the facility as “Official Action Indicated” and “not fully compliant” with cGMP.

“The Halol facility is under Import Alert, resulting in the refusal of shipments from the facility into the U.S., barring certain exemptions due to drug shortage, until the facility becomes fully compliant with FDA and cGMP standards,” according to Sun Pharma’s announcement.

In December 2022, the Halol facility was similarly placed under Import Alert by the FDA. Around the same time, Sun Pharma received a non-compliance letter for its Mohali facility, followed by the Dadra facility’s classification with an Official Action Indicated status.

“We have completed the implementation of Corrective and Preventive Action (CAPA) in the Halol facility, which is currently awaiting U.S. FDA inspection, and we are in the process of implementing CAPA at the Mohali and Dadra facilities,” according to Sun Pharma.

Despite these ongoing FDA compliance-related issues, the company contends that its manufacturing facilities in India “continue to play a vital role in ensuring seamless supply” and Sun Pharma’s adherence to global cGMP standards remains a key priority.