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India could ‘withdraw’ curbs on drug exports as pharma firms fear loss of business

In a meeting with govt officials, drug-makers flagged concerns that their clients may start buying products from other countries if restrictions on Indian products continued.

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New Delhi: With drug-makers ringing an alarm over the curbs imposed on the export of their products, the Narendra Modi government could soon “withdraw” the restrictions, ThePrint has learnt.

A high-level standing committee formed last month by the government to monitor the shortages of API (active pharmaceutical ingredients) — raw material used to manufacture drugs — is preparing to send a recommendation to the Department of Pharmaceuticals (DoP) to withdraw the export curbs.

India had decided to impose restrictions on the export of 13 APIs and as many formulations made from these APIs as their supplies remained disrupted due to the continuing lockdown in coronavirus-hit China.

The move came after the drug-makers — in a meeting organised by the DoP Thursday — informed top government officials that “the industry has enough stock available to continue production for next three months”.

Union Minister of Chemical and Fertilizers D.V. Sadananda Gowda was present at the meeting.

According to a DoP official, who attended the meeting, the drug-makers expressed their concern that “their clients may start buying products from other drug-exporting countries, like Bangladesh, if restrictions on Indian products continued”.

The official, however, also added that several provinces in China have started resuming production of APIs.

The meeting took place during the DoP’s annual summit, which is organised along with the Federation of Indian Chambers of Commerce and Industry (FICCI).

It was attended by several top government officials, including joint drug controller, Dr Eswara Reddy, secretary of DoP, P.D. Vaghela, joint secretary, DoP, Navdeep Rinwa, and Drug Controller General of India V.G. Somani. 

“The high-level standing committee formed by the DoP on API shortages is preparing to send the recommendation for withdrawing the restrictions. If DoP clears it, the Directorate General of Foreign Trade (DGFT) will notify,” the DoP official told ThePrint.

The DGFT is a department functioning under the Ministry of Commerce and Industry, and is responsible for handling matters related to foreign trade. 

India is the world’s leading supplier of generic drugs.

India exports around 24 per cent of medicines to the US and 26 per cent to the European Union, said an official of the Pharmaceuticals Export Promotion Council of India (Pharmexcil), a wing of the Ministry of Commerce. 

Also read: India’s production lines are being hurt by extended factory shutdowns in China

Concerns over losing business

“One of the top API companies of India informed the government that it has stock for the next 70 days. It means the company can produce formulations for the next three months. Minister (Gowda) has assured the (pharma) industry that he will re-consider the restrictions,” said the DoP official quoted above.  

A top Mumbai-based pharma company official, who was also the part of the meeting, said: “Industry has expressed concern over losing their business to other cheaper markets.” 

“For instance, our restrictions will create panic in countries like the European Union or the United States, which are our top importers. They will obviously start looking for options and try newer and cheaper markets. It will be a huge loss to our market,” the official added.

Curb on exports caused Europe to ‘panic’

The decision to curb the exports was taken by the high-level committee last month under the chairmanship of Dr Reddy.

The curbs meant firms could no longer export freely and that they were required to seek licence to export.

According to a report by Reuters, the export curbs “amid the spreading coronavirus outbreak has caused panic in Europe and will severely impact businesses in the sector”.  

“I am getting a huge number of calls from Europe because it is very sizeably dependent on Indian formulations and we control almost 26 per cent of the European formulations in the generic space. So they are panicking,” the report quoting Dinesh Dua, chairman of the Pharmexcil, stated.

“India’s list of restricted medicines account for 10 per cent of its total pharmaceutical exports… there were $10 million worth of drugs affected by the curbs currently at Indian ports or close to being readied for export.”

Also read: Shaken by coronavirus crisis, India looks to become bulk drugs major to cut China imports


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