New Delhi, Jan. 6 -- Facing sharper scrutiny over drug safety, India is preparing to overhaul its pharmaceutical licensing system by introducing a separate wholesale licence for bulk drugs, APIs and key starting materials.

The move aims to dismantle the current umbrella licensing framework, create a comprehensive database of nearly 1.2 million bulk drug traders, and sharply improve traceability of raw materials, over 70% of which are imported from China. Officials say this will allow regulators to quickly pinpoint and hold accountable dealers supplying substandard inputs in India's $50-billion pharma market.

The proposal follows the global reputational damage after the deaths linked to contaminated Indian-made cough syrups. A draft noti...