India’s pharma exports rose more than 7% year-on-year to $5,412.12 million in the quarter ended June 30, a growth that came in the backdrop of the lockdown for COVID-19 and associated challenges, especially on the logistics front.
As per Pharmaceuticals Export Promotion Council of India Director General Ravi Udaya Bhaskar drug formulations and biologicals powered the growth with a 15.1% increase to $4,138.97 million. It was the only category where growth was registered and contributed to 76.48% of the total exports.
Bulk drugs and drug intermediates, the other major category, declined 8.38% to $895.77 million.This happened amid mounting uncertainty on raw material availability from China and India restricting for export a clutch of APIs and formulations made from them. Initially, there were also fears that the raw material inventory available with the pharma companies would barely be enough for 2-3 months.
ADVERTISEMENT
Surgicals and vaccines, two promising categories, also reported a decline in export, Mr. Bhaskar said.The decline in exports of surgicals was 15.83% to $130.02 million, while those of vaccines dropped 30.49% to $147.46 million.
Besides a drop in demand for various products as countries battled the pandemic, a key factor that came in the way of smooth flow of trade were issues concerning movement of goods. A combination of factors pushed up the freight cost for the companies, Mr. Bhaskar said.
Dr.Reddy’s Laboratories president and CFO Saumen Chakraborty, a few days ago, had also referred to how higher freight cost due to shortage of carriers for shipping the goods from India to other countries due to COVID-19-related disruptions led to an increase in the expenses for the company.
ADVERTISEMENT
The challenges faced by the exporters and the time to normalcy are also reflected from the month-wise export numbers. In April, the pharma exports actually declined 0.84% to $1514.04 million as against the quick estimates shared earlier that reported a negligible increase.
As the situation on the ground improved and restrictions were relaxed, the exports in May increased 14.30% to $1928.20 million . According to Mr. Bhaskar, in June the exports were $1969.88 million or 7.26% higher than $1836.52 million of the corresponding period in 2019.