Alkem Laboratories told FoodNavigator-USA.com that it has found a way to produce sucralose using expired patents.
With a capacity of 10 metric tons per month, Alkem said it will be targeting the global food and beverage industry, as well as the table top segment.
The process, it says, has been reviewed by legal council in the US and Europe, and the firm is confident that it will not be infringing on any patents held by Tate & Lyle.
The UK-based company has so far held a monopoly of the lucrative global sucralose market with its Splenda brand product.
FoodNavigator.com last year revealed that another Indian firm also claims to be well on the way to producing sucralose.
Pharmed Medicare said it had developed an alternative process for the production of the sweetener, a disclosure that sent ripples of concern through the investment world, causing a dip in Tate & Lyle share prices.
Pharmed today confirmed that it is due to enter the global sucralose table-top market later this year with the completion of a 60 ton/year factory.
The firm also has plans to construct a 1000 ton/year facility to produce sucralose as an ingredient for the food and beverage industry.
Moves such as those by Alkem and Pharmed could mark the emergence of viable competitive sucralose production in the marketplace.
And this, in turn, would lead to a sharp fall in the price of the ingredient.
Indeed, overall sweetener prices are forecast to take a downward turn, following an increased dynamism in the sweetener industry, which is currently seeing a number of new options available after years of relative stability, according to market researcher Freedonia.
A recent report by Freedonia revealed that the US sweetener market is poised to grow 4 percent per year, to reach over $1bn in 2010.
And Frost & Sullivan estimates the European intense sweetener market will reach $362m in 2012.
"Up until now, sucralose has not seen the kind of price erosion that happens with high intensity sweeteners because demand has remained strong, and also because Tate & Lyle still maintain some patents on the production techniques that have really prevented new producers from entering the market in the same way," Freedonia analyst Mike Richardson told FoodNavigator-USA.com in January.
Tate & Lyle filed the original product sucralose patent in 1976.
This recently expired, opening the product up to competitors.
But other firms have until now been reluctant to enter the market for fear of slipping up somewhere in the complex web of patents, and being slapped with astronomical legal fees and fines.
In the same way, the food and beverage industry - both at manufacturing level and retail level - has not jumped at cheaper alternative sucralose products manufactured in China for fear of a legal backlash.
Alkem is also likely to face such market caution, even though it stands strong in its claims that "we're doing it the right way".
But Tate & Lyle is unlikely to loosen its hold on the market without a fight.
Its "patent matrix remains strong", it says.
"As we have previously shown, we will vigorously enforce our intellectual property rights to protect our business," the firm told FoodNavigator-USA.com, adding that "we believe Alkem's plant is based on first-generation technology - our plants are third generation."
But although Alkem said it does not believe its comparative small-scale production will cause Tate & Lyle much worry, it nevertheless maintains that its production will be "competitive."
"India is a place where you have quality and economy rolled into one.
That 'Indian advantage' extends to sucralose too.
Our product is of the highest quality, and response to samples has been fantastic," said Alkem's business development manager Krishna Kumar.
The firm claims it is already talking to a number of "big boys" in the US and Europe, and is positioning itself for strategic alliances in the "foreseeable future".
The firm said it could not provide an indication of its price range, but its UK-based partner, Nuscaan, which is selling the sucralose product in that country, said its prices are around the £130 ($255) per kilo mark.
Nuscaan, which already has a number of table-top sucralose products on the market under the brand name Sucra-Lo, said the major obstacle to breaking into the market is the "legal cloud" that still hangs over sucralose production.
"Alkem is doing everything correctly.
The process is non-infringing.
But it's convincing the market that there are no problems - that's the problem," said Nuscaan's director Jim Currie.
FoodNavigator-USA.com has not seen any legal documents and cannot attest to either the quality or the patent viability of Alkem's sucralose.
But if the firm's claims are true, sucralose may soon face the same fate as did aspartame, when its margins fell by 80 percent after sweetener NutraSweet was exposed to competition.