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Depending on China for imports could threaten India’s drug security: Export council DG

Udaya Bhaskar, Director-General of Pharmexcil, says India’s over-dependence on China for its bulk drugs requirement led to fall in exports in February and March.

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New Delhi: Over-dependence on China for medicinal imports could become “a great threat to the country’s drug security and national health”, a top official in the Narendra Modi government said.

“The pandemic is an eye-opener for the pharma industry, which is heavily dependent on China for the active pharmaceutical ingredients and key starting materials (KSMs),” Udaya Bhaskar, Director-General, Pharmaceuticals Export Promotion Council of India (Pharmexcil), told ThePrint. 

“If not addressed, it would become a great threat to drug security and national health,” he added.

Pharmexcil is an arm that functions under the Ministry of Commerce and Industry. Set up under the provisions of Foreign Trade Policy in 2004, it’s a body for promoting pharmaceutical exports from India.

According to the trade data available with the Pharmexcil, India’s over-dependence on China for its needs of bulk drugs has led to fall in exports in the months of February and March this year. 

“India, being dependent on China to an extent of 60-70 per cent of its needs of bulk drugs, has suffered disruption in the supply chain with the outbreak of Covid-19. Our imports of bulk drugs went down significantly in February (which led to lesser exports),” Bhaskar said.

“Combined with lockdown measures across the countries and export restrictions on some of the products, all have contributed to the downturn in export growth,” Bhaskar added.

Overall, he said, “Covid-19 pandemic has brought down the estimated pharma exports to $20.58 billion, against the expected $22 billion, with overall growth of 7.57 per cent, instead of a double-digit growth”.

The export stood at $19.13 billion in the last fiscal. 

Bhaskar warned: “China is already way ahead of India in bulk drug space and now they have started focusing on formulations space as well. Going forward, China may become a potential competitor to India in formulations as well.” 

Also read: India lists 38 drug raw materials for which it wants to end dependence on China 

Covid in China impacted Indian export of drugs 

Bhaskar’s caution is backed by data where India’s drug exports were majorly hit due to disruption in the supply chain in the wake of the Covid outbreak in Wuhan, the epicentre. 

According to the Pharmexcil’s data, drug exports in January grew at 11.72 per cent, but plunged to 7.7 per cent in February and they fell to -23.24% in March — when compared with the corresponding figures during same months in the previous year. 

Chinese markets were closed due to the pandemic in February and March. 

As Chinese markets started re-opening, India registered a “slight” growth of 0.25% in April, when compared against the same month in the previous year.  

“Usually Indian pharma exports during February and March are ‘quite brisk’ and are to an extent of 22-23 per cent in the first ten months (April-January),” he added.

Bangladesh, China, Indonesia emerging top competitors 

With Covid wreaking havoc across the globe, various countries are trying to develop their own capabilities in manufacturing essential medicines, which may threaten India’s status as the “pharmacy to the world”.

“In the current scenario of the pandemic, every country is trying to develop indigenous capabilities of manufacturing essential medicines, including the USA — which is India’s largest market for pharmaceutical exports,” he told ThePrint. 

“It would be a challenge for Indian players in the long run as we are volume-based generic manufacturers. To sustain our image in the global market, we need to strengthen our capabilities in biologics, biosimilars and complex generics,” he added.

According to the government trade analysis, China, Bangladesh, Indonesia are emerging as India’s top competitors. 

“Bangladesh, being an LDC (least developed country), is waived off from the patent regime and is one of the potential competitors for patented formulations in the region of Asia-Pacific. Indonesia is emerging as a strong competitor for India in vaccines,” Bhaskar said.

Also read: Govt gives Rs 15,000-cr boost to API and devices industry to check shortage amid COVID-19

Potential Covid drugs could bring exports back on track

Many Indian companies are increasing the capabilities of production of repurposed drugs for Covid treatment and prevention such as hydroxychloroquine, lopinavir, ritonavir, dexamethasone owing to the growing demand across the globe, said Bhaskar.

“Also, Indian companies are in the frontline to manufacture and distribute the potential Covid-19 candidates such as remdesivir, favipiravir, tocilizumab etc. Even the vaccine manufacturing companies in India are able to bulk produce and supply to the global procurement agencies,” he added. 

“All these factors may boost the exports of Indian pharmaceuticals this year and we are expecting the exports would be around $24-25 billion, next fiscal,” Bhaskar said.

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  1. Mr. Director General of Pharma it is your bad roton polities that India had to depend for the basic drugs on China. You have been sleeping over years and minting money for awarding licence to manufacture basic drugs is the reality. Now all of sudden when heat started you come up with excuses. Mr. Director General you are the main culprit to hold permission for licence as a result of which no foreign company or the Indian company could start basic drug manufacturing although India had capabilities. Pl don’t shed crocodiles tears. You are answerable why you have been sleeping over the years. I believe India must file criminal proceedings against you for pitting India against China. The same licence is awarded in China in 7 days must be made known to Govt and public both.

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