New Delhi, Jan. 16 -- The government is likely to announce setting up of new drug testing laboratories and an increase in regulatory manpower in the upcoming Union budget, according to three government officials aware of the deliberations. Amid increased global scrutiny on India's pharmaceutical exports, the move to revamp an existing scheme on drug regulation aims to tighten oversight of a $60-billion industry that supplies nearly a fifth of the world's generic medicines.

The Centre has received numerous representations from state governments and Union territories, underscoring the urgent need for a more robust drug regulatory system, the officials said. Seized of the issue, the union health and family welfare ministry is finalizing a c...