Government of India
Department of Commerce
Directorate General of Foreign Trade
Udyog Bhawan, New Delhi – 110 011
Policy Circular No. 19 /2009-2014 (RE 2010)
Dated: 14th February, 2011.
To
All Regional Authorities (RAs);
All Commissioners of Customs;
All Commissioners of Excise;
Trade & Industry.
Subject: Guidelines for availment of input combination for pharmaceutical
products manufactured through Non Infringing (NI) process.
Trade & Industry belonging to Pharmaceutical sector and the Pharmaceutical
Export Promotion Council have been representing before Department of Commerce
that neither the Standard Input Output Norm (SION) notified for the
pharmaceutical products nor the adhoc norms ratified for such products by DGFT,
allow them the actual requirement of inputs for manufacture of drugs
(particularly the APIs) through Non Infringing (NI) process. Hence they have
been requesting for inputs combinations based on actual consumption for such
products.
- The matter was deliberated upon in details in consultation with the stake
holders. It has also been brought to notice that the product patent for a number
of pharmaceutical products patented in the country of import, particularly in
the developed markets, have expired or are in the verge of expiry. However the
process patent still exists for such products. India has great potential to get
a major share of production of such products adopting a different manufacturing
process (without infringing upon the process patent) and export such products to
those specific countries. During these discussions, it has been observed that
the Standard Input Output Norm (SION) or the adhoc norm for an export product is
based on the normal or standard route of manufacturing and the wastage norms are
based on All Industry Average consumption data. Whereas manufacturing of a
pharmaceutical product through NI process (wherein the product patent has
expired but the process patent still exists in the country of import) entails
higher wastage.
- Foreign Trade Policy (FTP) provisions do not allow such dispensation. Once a
SION has been notified for a product based on all Industry average or the adhoc
norm for the product is ratified, inputs and the corresponding quantities are
allowed as per SION or adhoc norms only and no additional quantity of input
(irrespective of actual consumption) is allowed. Hence the manufacturer of
pharmaceutical products through NI process, are not entitled for actual wastage
than that of all Industry average of wastage norms (SION) or adhoc norm,
irrespective of the country of export.
- In view of above and various in-house deliberations, it has been decided to
incorporate a new provision to allow this facility to pharmaceutical sector
subject to fulfillment of certain specified condition and documentation thereof.
Accordingly Notification No. 22 dated 14.02.2011 and Public Notice No.29 dated
14.02.2011 have been issued, detailing the new provision stated in paragraph
4.1.3 of FTP, paragraph 4.7A of the Handbook of Procedure, Volume 1,
introduction of new application form viz. ANF 4J, Chartered Engineers
certificate of input requirement in Appendix 32C and a new format in Appendix
23A along with a Central Excise certificate for actual consumption & amendment
in guidelines for applicants in the application form (ANF 4F) related to
redemption and Bond waiver.
- These input combinations under NI process shall be country specific and
exporter specific.
- Trade & Industry is requested to see the details of the provision carefully
in the aforesaid Notification and Public Notice on the subject. Any difficulty
in implementation of the aforesaid guidelines shall be brought to the notice of
this Directorate immediately.
This issues with the approval of DGFT.
Sd/-
(Tapan Mazumder)
Joint Director General of Foreign Trade
Tel. No. 2306 1050
E-mail: [email protected]
(Issued from F. No. 01/94/180/AA/NI process/AM11/PC-4)