New Delhi : The government needs to undertake measures to enhance the quality of drugs and vaccines manufactured in the country, reduce import dependency and explore non-traditional markets, in order to boost the pharmaceutical exports, says a panel of Members of Parliament in a latest report.
The Department related Parliamentary Standing Committee on Commerce, in its report on the Demand for Grants (2022-23) of the Department of Commerce, also expressed its admiration on the substantial export performance of the pharmaceutical sector which surged by 18% in the pandemic year of 2020-21.
The department apprised the panel that India registered an export of $24.4 billion in the pharmaceutical sector with an outstanding annual export growth of 18 per cent in the year 2020-21. It was stated that the exports of drug formulation including Covid-19 vaccines and related medicines surged by 19 per cent during the said period.
The inflows in Foreign Direct Investments (FDI) in the pharmaceutical sector showed an increase of 200 per cent in the FY 2020-21 which remained buoyant in 2021-22 and were mainly on account of investments to meet Covid- 19 related demands for therapeutics and vaccines, said the department.
“The accomplishments in exports and FDI due to spur in demand for India’s vaccines and drugs in times of Covid-19 pandemic is a testimony of its potential as a reliable manufacturer of pharmaceuticals in the world. The Committee is of the view that the necessity of pharmaceutical products and vaccines in the management of coronavirus outbreak bodes well for the sector to innovate and invent for meeting the global requirements,” said the 167th report of the Committee tabled on March 22, 2022. The 31-member Committee is chaired by V Vijayasai Reddy, Member of Parliament, Rajya Sabha.
“It, therefore, recommends the government to undertake measures for enhancing the quality production of drugs and vaccines by taking facilitative steps such as reducing the high import dependency on API (active pharmaceutical ingredients) and emphasising on intensive R&D as well as exploring the non-traditional markets for boosting the pharmaceutical exports,” it added.
On being asked about the prospects of India in becoming a global leader in supplies of Covid-19 drugs and vaccines, the department informed the Committee that the Indian pharmaceutical industry ranks third in the world in pharmaceutical production by volume. As the largest supplier of generic medicines with a 20 per cent share in the global supply, India has evolved as a dominant global player in the pharmaceutical sector.
The Committee also noted that India needs to leverage the ‘China Plus One Strategy’ for becoming an alternative investment destination for major global companies that intend to substitute their China-dependent supply chains.
The ‘China plus One’ strategy wherein the leading global companies are diversifying their dependence on China would contribute to India’s export performance in the ensuing years. The strategy would provide an opportunity to the trading scenario of India especially for the sectors of textiles, pharmaceuticals, specialty chemicals and electronics. In response to the Committee’s query on devising a mechanism to capitalise on the said strategy to boost exports, the department informed that it is continuously engaging with all the stakeholders in this regard.
The growing preference of companies located in major economies of Europe and US to shift to other manufacturing bases than China provides a window of opportunity for India’s trade sector which needs to be capitalised.
“The Committee, therefore, recommends that a policy measure to benefit from the strategy should be devised which should incorporate steps to ensure a business friendly environment and best-in-class manufacturing infrastructure for the incoming investments. It further recommends that the Government should endeavour to pursue Free or Preferential Trade Agreements or an interim and mini-trade agreement with countries that seek to invest in India under the ‘China Plus One Strategy’,” added the report.