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pharma companies are facing problems in receiving payments from some countries due to non-acceptance of key documents by a few banks, according to Pharmaceutical Export Promotion Council (Pharmexcil).
“Our exporters are particularly having trouble in their transactions with some countries which are facing sanctions from the United Nations and other issues,” PV Appaji, Director-General, Pharmexcil, told BusinessLine here.
As per the feed back the council got from its members business transactions with Venuzeula, Sudan, Nigeria, Russia, Iran, Myanmar and Uzbekistan are not being seen `positively’ by many public sector banks.
“They have not been accepting key documents for issuing letters of credit and extending other facilities by citing sanctions and other aspects,” Appaji said. The council had even obtained a clarification from the Reserve Bank of India that essential medicines were not covered under sanctions indicating that banks could accept relevant trade documents for providing facilities.
However, this did not prove helpful as banks were ‘ignoring’ even RBI’s view, the official claimed. The Pharmexcil has approached the Ministry of Commerce, which is expected to hold a meeting with the Ministry of Finance to convey the inconvenience being caused to exporters by some banks, he added.
The Centre has also asked the council to ascertain the quantum of payments involved/help up. “We have already asked our members to provide complete data and information on their halted payments,” Appaji said.
Meanwhile, efforts are still underway on the oil-for-drugs barter plan that India had proposed with Venezuela to repatriate millions of dollars owed to domestic pharmaceutical companies.
Many drug makers, including Dr Reddy’s Laboratories Ltd, have pending payments from cash-strapped Venezuela, which has been witnessing a series of currency devaluations in the recent past.
As of now, Venezuela, Nigeria and Angola have turned ‘problematic’ in repatriations for Indian pharma companies. As per industry estimates, over ₹2,000 crore in payments were due from Venezuela alone.
The Centre had earlier prepared a draft proposal for the barter plan by roping in the RBI, banks and drug makers. It is yet to be finalised.
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