Foreign Trade Policy 2015-20: What does it have in store for the pharmaceutical industry?
April 7, 2015: The Foreign Trade Policy (FTP) 2015-20 was recently unveiled by Ms Nirmala Sitharaman, Minister of State for Commerce & Industry (Independent Charge), Government of India. With the Indian pharma industry facing hurdles in markets like Japan and China, the FTP 2015-20 aims to address issues related to non-trade barriers and regulations faced by them abroad.
It may be noted here that India aims at doubling its exports to US$ 900 billion by 2019-20 and the Policy has said that one of the focus areas over the next five years would be on promoting exports of high value products with a strong domestic manufacturing base including engineering goods drugs and pharmaceuticals.
"The challenges posed to the pharmaceuticals sector by NTBs (non-tariff barriers) in Japan and regulatory hurdles in China have to be addressed," according the FTP.
It is important to note here that even after implementing a comprehensive free trade deal with Japan, Indian pharmaceutical sector faces procedural issues like tedious registeration process in Japan. With Japan being the second largest pharmaceutical market in the world, India's less than one per cent share of the total Japanese pharmaceutical market can be expected to improve in the coming years.
Similarly, Indian exporters in China face regulatory hurdles and India has asked to provide greater market access to Indian exporters.
"Market access and non-tariff barriers block India's exports of pharmaceuticals...(they) are unable to make a breakthrough in China's highly controlled and, at times, opaque SOE (State Owned Enterprises) business," the FTP said. In addition, the Policy also mentioned that a composite programme of healthcare products and services will be conducted in various regions to showcase and market India's unique strengths.
"A track and trace policy for all exports of medicinal products will be effective from 1 April 2015," it added. The Government of India had asked pharmaceutical companies to build track and trace capability for their exported medicines using barcode technology at three levels of packaging primary, secondary and tertiary. A barcode helps in tracking and tracing of origin of drugs, which in turn helps in minimising the chances of genuine drugs being considered spurious, sub-standard or counterfeit.
The various steps announced in the FTP are expected to fast-track the growth of pharma exports from India. The country already exports drugs worth over US$ 10 billion and is known as a global hub for generic medicines. The size of the Indian domestic industry is estimated at US$ 20-22 billion. India is currently home to the world's fifth largest generics maker, post the merger of Sun Pharma and Ranbaxy.
Branding campaigns are also being planned for promoting exports of pharmaceuticals, it said, adding high potential for the sector exists in markets including Europe, Australia, Russia, South Asia and the CIS region. The government, it added, will run special programmes for trade promotion in Japan in identified sectors such as pharmaceuticals.