Pharma Exports May Face Challenges From China, Russia.

Commerce ministry to meet on July 26 to discuss issues facing the industry.

China’s massive expansion of its bulk drug industry and Russia’s move to achieve self-sufficiency in the pharmaceuticals sector are likely to pose challenges to the manifold export growth targets set out for Indian pharmaceutical exports by the commerce ministry if not adequately addressed, say officials.

The Chinese government early this year had announced a plan to invest $750 million to build capacities in pharmaceutical ingredients for supply to drug makers in other countries. This is aimed at creating capacities that can comply with the stringent quality standards being enforced in regulatory markets of America and Europe, where it has no presence. Bulk drugs (API) and intermediaries from China are already flooding Asian and Africa countries, including India.

The commerce ministry has announced an ambitious target of more than doubling the pharma exports to $25 billion from the current $10 billion by 2014. The three-year time line itself is an uphill task going by the current growth rate of between 10 and 15 per cent in pharma exports. Any further momentum is possible only with the increase in exports to all the major markets while introducing measures that enhance the competitiveness of Indian products.

The ministry will be discussing all these aspects on July 26 at a meeting specifically convened to take a view on various suggestions that had come from the domestic pharma companies for formulating new measures in line with the export targets.

It is also closely watching the developments in countries like China and Russia, according to PV Appaji, executive director of Pharmaceuticals Export Promotion Council (Pharmxcil), which works under Ministry of Commerce and Industry.

China is also expanding into formulations, one of the reasons why Indian pharma exports to Vietnam declined 10.31 per cent during the April-January period of FY 11, according to the feedback received from the domestic exporters by the nodal agency.

Contrary to the general perception, entry into Russia is increasingly getting difficult for Indian companies, except a few, as the country is tightening its market in line with the stated objective of achieving 75 per cent self-sufficiency, said Appaji. Russia is the fourth largest importer of Indian drugs after the US, UK and Germany in that order.

For the 10-month period ending January 2011, Indian pharmaceutical exports stood at Rs 38,070 crore with the US alone accounting for Rs 9,020 crore, registering a year-on-year growth of 23.28 per cent, while the total exports registered a growth of 10.44 per cent over previous year.

Twenty-six destinations account for two thirds of the total exports. Of this, countries like Brazil, Nigeria, Israel and Canada turned positive during the 10-month period, compared with a dip in exports in the same period a year ago.

Source : sify.com