The Chinese Government said on Wednesday that it would review anti-dumping measures on sulfamethoxazole (SMZ), an antibiotic imported in large quantities from India, leaving open the possibility of extending duties, currently up to 37.7 per cent, that are due to phase out next June.

The Ministry of Commerce said in a statement that it decided to begin a mid-term review of anti-dumping measures, put in place in June 2007, after a China-based pharmaceutical company, the Shouguang Fukang Pharmaceutical company, filed an application in June for a review. In 2007, the ministry put in place anti-dumping duties of 10.1 per cent to 37.7 per cent on the import of SMZ from India, following complaints from local producers.

The Shouguang company had asked for an adjustment of tariff rates “as Indian SMZ producers and importers expanded their dumping efforts in China after the imposition of anti-dumping duties,” the official Xinhua news agency reported.

The ministry said it would examine dumping margins “based on current market conditions” and evidence provided by Shouguang. China took the decision to impose anti-dumping duties in 2007 after local producers said they suffered losses because of cheaper Indian imports.

In recent months, Indian officials and representatives of pharmaceutical companies have reiterated calls on the Chinese Government to open up the booming domestic healthcare market, which is in the midst of a multi-billion dollar reform, and to loosen registration procedures which companies say have kept out Indian players.

In March, a 15-member delegation from the Indian Drug Manufacturers Association (IDMA) held talks with officials of China's State Food and Drug Administration (SFDA) to raise concerns over registration rules, as well as to address problems over documentation requirements, laws for clinical testing and procedures for registering drugs.

While Indian companies say opaque Chinese registration procedures have blocked exports, Chinese officials said Indian companies too needed to do more to understand the market.

Liang Wentao, an official at the Ministry of Commerce, said last year Indian companies had “to learn from the experiences” of other foreign companies that he said had better success in the domestic market.

While China exports over $3 billion worth of pharmaceuticals, largely Active Pharmaceutical Ingredients (APIs), to India every year, India exports around $500 million to the country annually.

Bilateral trade

Indian officials have identified the pharmaceuticals sector as a key area to push imports, amid efforts to address a fast-widening trade imbalance which rose to a record $20 billion last year. Bilateral trade between both countries reached $61.7 billion in 2010, with China becoming India's largest trade partner.

The trade deficit has, however, continued to widen this year, reaching a record $14 billion after seven months.