Pharmaceutical exports from India, a key component of the country’s foreign trade basket, are estimated to have grown to $17.25 billion in the financial year ended March 31 or almost 2.5% higher than the previous fiscal. The growth assumes significance in the context of challenges under which it was achieved, from increased competition in the mainstay generics space, particularly in the U.S., pricing pressure as well as heightened regulatory scrutiny.
GST hiccups
The run-up and roll-out of Goods and Services Tax (GST) also did not make things easy for the industry.
“Overall, it was $17.25 billion,” Pharmexcil director general Ravi Uday Bhaskar said, pointing out that this was the first time the exports increased despite a negative growth in the U.S., the largest market contributing to over 31% of the revenue. During the 11 months up to February, pharma exports to North America totalled $4.83 billion or 8.04% lower compared with $5.25 billion achieved during the same period of the previous fiscal. This is also the first time pharma exports have raced past the $17 billion mark. In 2016-17, it was $16.84 billion and in 2015-16 $16.89 billion. Markets wise, the major growth drivers were Asia (excluding West Asia), CIS and Latin American countries, according to details made available by Pharmaceuticals Export Promotion Council of India.
Giving details, he said after an initial setback, the exports have been growing and March was the fifth consecutive month of growth. During the 11 months ended February, the exports increased 2.32% to $15.51 billion, with the change in revenue being $351.35 million.
According to the April-February figures, export of bulk drugs and formulations — together constituting 92% of the total exports — grew by 5.29% and 19.95% respectively. A cause for concern was the negative growth in vaccine exports.
The share of vaccines in the total exports declined from 4.3% during the period in 2015-16 to 4.04% in 2016-17. This segment witnessed a negative growth of 10.25% in the first 11 months of last fiscal.
Though better compared with the previous fiscal year and having several several positives, the total export – AYUSH, bulk drugs, intermediates, formulations, biologicals, herbal products, surgicals and vaccines – is way short of the ambitious $50 billion target by 2020.
A more realistic target in the backdrop of the trends in the international market, including many of the buyer-countries seeking to become self reliant in drug production, would be $21-22 billion by 2020, said Mr. Bhaskar.
