Economy

Analysis | India’s change of heart on hydroxychloroquine exports lacks conviction

Amiti Sen New Delhi | Updated on April 12, 2020

Hydroxychloroquine   -  Reuters

Decision to allow exports of anti-malaria drug to US, Brazil, neighbouring countries, is at odds with April 4 notification

The entire government has swung into motion to establish that India’s decision to export anti-malaria drug hydroxychloroquine (HCQ), in high demand globally for treating Covid-19, was not a result of US President Donald Trump’s threat of retaliation but was based on careful scrutiny of stocks and the country’s wish to help those in need.

This explanation, however, is in conflict with some other decisions taken by the government, such as the complete prohibition on export of HCQ, without any exceptions, notified by the Directorate General of Foreign Trade (DGFT), as recently as April 4.

In fact, April 4 was the day when Trump asked Prime Minister Narendra Modi to release the orders for exports for HCQ made by Washington. Trump threatened India with retaliation two days later when he did not receive any assurances.

Changes to notification

A scrutiny of the notification issued by DGFT on April 4, which basically amended the first notification prohibiting HCQ exports on March 23 making it more stringent, is important as it showed the extra length the government went in order to establish that it would not allow any exports of the medicine at all.

While the March 23 notification allowed exports from SEZs and EoUs and also against confirmed orders already made by buyers, the April 4 amendment did away with it. Another exception in the March 23 notification allowing exports of HCQ on humanitarian grounds on a case-to-case to basis on the recommendation of the Ministry of External Affairs was also removed in the April 4 notification. The amended notification left no scope for exports, either on humanitarian grounds or any other.

So, it is rather surprising that in a matter of just three days, the government had a change of heart and wanted to start exporting on humanitarian grounds. Also, it now wants people to believe, that the stock position changed so dramatically in these three days that the government is now comfortable enough to export the surplus.

So, India is now ready to export to not just the US but also other countries such as Brazil and its South Asian neighbours but there is no break-up available to see if the giant’s share is being cornered by Washington.

It is kind of ironical that while New Delhi is ready to export 3.28 crore tablets in stock, the US, on the other hand, is building up its stock by importing 29 million (2.9 crore) doses, much of it from India, as disclosed by Trump.

Published on April 12, 2020

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