An Indian manufacturer of drugs to treat the deadly HIV/AIDS virus is suing the South African government after failing to clinch a 400-million-dollar tender, South African media reported Monday.

Aurobindo, one of the world's biggest producers of generic life- prolonging antiretroviral treatment (ARVs), says its tender was, on average, 30 per cent cheaper than locally-manufactured products, Business Day newspaper reported.

Over half the contract for the national supply of ARVs went to two local pharmaceutical companies, Aspen and Adcock Ingram, also manufacturers of generics. The rest went to patent holders.

South Africa, which has over 5 million HIV-positive people, the largest number of any country in the world, has a policy of giving preference to local companies in tenders for the supply of ARVs.