As one of the most promising emerging and leading superpower, India’s contribution to the world of pharmaceuticals, is going unparalleled. Whether it is in terms of research and innovation of new drugs or development of existing drugs, or even in terms of medical intermediaries, Indian experts have contributed and is still continuing to do so relentlessly. Let us understand how Indian pharma exports is creating such huge demand and importance in the global arena.
About Indian Pharmaceutical Industry
- In terms of pharmaceuticals, India ranks 3rd worldwide for production by volume and 14th by value.
- The current market size of the Indian pharmaceutical industry is around US$ 50 billion.
- Indian pharma exports went up by 18% to a record high of US$ 24.44 billion during pandemic.
- The generic medicine manufacturers in India have made the country to be world’s third largest provider of generic medicines by volume, with a 20% share of total global pharmaceutical exports.
- The pharma exports in 2021-22 sustained a positive growth despite the global trade disruptions and drop in demand for COVID related medicines.
- The trade balance continues to be in India’s favour, with a surplus of US$ 15175.81 Million.
- Indian vaccine industry developed Covid vaccines with indigenous technology in collaboration with India’s research institution like ICMR and NIV with in shortest time on par with highly developed countries like America and EU.
- India provided 115 million doses of vaccines to more than 97 countries.
- As part of the trade agreements, India also signed cooperation agreement with UAE and Australia which will give enhanced access to Indian pharma products to these markets.
How are pharma manufacturers in India meeting the requirements of highly regulated markets like those of the USA, UK, Middle East, European Union and Canada?
The answer lies with ever increasing investments in the infrastructures, world class manufacturing excellence, cost-competitiveness, trained human capital, and many more advantages. India’s pharma manufacturing costs, is lower than in the United States and almost half of Europe.
Production Linked Incentive (PLI) schemes for pharmaceuticals, critical key starting materials (KSMs), medical devices, bulk drug parks, etc. have been introduced to encourage manufacturers. The scheme is expected to generate an incremental sale of Rs. 2,94,000 crore (US$ 37.09 billion) in six years, starting from 2022-23 to 2027-28.
By 2023 itself, India wants to create a fund of about Rs 1 lakh crore (US$ 1.3 billion) to boost businesses to manufacture pharmaceutical ingredients in the country.
Major Statistics about Export Countries for Indian Pharma Products
- About two-thirds of India’s exports goes to NAFTA, Europe, and Africa.
- The top five export destinations for Indian Pharma in FY 2021-22 are USA, the UK, South Africa, Russia, and Nigeria.
Image Source: www.ibef.org
- For the FY 2021-22, the USA, the UK and Russia are among the largest importers from India at a share of 29%, 3% and 2.4%, respectively.
- India’s pharma exports to USA in value grew at a CAGR of 6.9% over last three years.
- Further, for UK and Russia, the same grew at a CAGR of 3.8%, and 7.2%, respectively over the same period.
- Between April 2021 to August 2021 the medicines that got exported from India was worth US$ 9.92 billion.
- Total drugs and pharmaceuticals exports were aound US$ 24.44 billion in FY21.
- Pharmaceutical exports from India shipped US$ 1.37 billion in bulk intermediates from April to August 2021.
Top Approximated Values Generated at Different Countries in FY 2021-22
- USA – US$ 7,101.6 million
- UK – US$ 704.5 million
- South Africa – US$ 612.3 million
- Russia – US$ 597.8 million
- Nigeria – US$ 588.6 million
India’s Category wise Exports in 2019-20 (Value in USD Million)
- Drug formulations and Biologicals- 11.27%
- Bulk Drugs and Drug intermediates- -0.32%
- Surgicals- -21.32%
- Ayush and Herbal Products- -4.04%
- TOTAL- 7.59%
*Source: Directorate General of Commercial Intelligence and Statistics (DGCIS)
India’s Export Share in Global Market
- India’s share of pharmaceuticals and drugs in the global market is 5.92%.
- Formulations and Biologics constituted the major portion of India’s exports with a share of 73.31% followed by drug intermediates and bulk drugs intermediates with exports of US$ 4437.64 million.
- In 2021-22, India exported pharma products worth US$ 24.62 billion.
- In March 2022, India exported US$ 2.4 billion worth of drugs and pharmaceuticals, a 23% increase immediately from February 2022.
What are the policies which FPME is working on with the government of India to encourage pharma exports?
- Promoting Indian Pharmacopoeia, as it should be made mandatory under every individual trade agreement with individual countries to accept goods manufactured under IP.
- Mandatory bar codes, track and trace, but only after universal implementation.
- Banks not to charge exporters for their foreign exchange related services.
- Freight equalisation mechanism in case of high volume, low value goods exports, or government should interfere to reduce container as well as air freight.
- Export Credit Guarantee Corporation Limited (ECGC) or credit insurance premium to be minimalised and should be zero when supplying to international government agencies.
- Single port registration, lesser turnaround and avoiding duplication of documentation.