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In what could be a concern for drug-makers, pharma exports to the United States declined 8.66 per cent in the first nine months of the current financial year.
According to the data available with the Ministry for Commerce, exports to US decreased to $5314 million during April-December 2021 from $5818 million in the same period in the previous fiscal. The total exports to the world too grew only marginally at $18217 million as against $18072 million in the year-ago period.
The overall exports to the North American Free Trade Agreement (NAFTA) region too fell by 7.86 per cent at $5821 million. Exports to Europe grew sluggishly at 1.15 per cent while the same to Africa showed 2.38 per cent growth.
The dip in pharma exports to US and tardy growth with reference to Europe and Africa may have significant implications as these three geographies account for 65.5 per cent of India’s total pharma exports. In FY21, India’s pharma exports stood at $24.46 billion registering 18.19 per cent growth over previous year.
Regulatory challenges
“Pharma exports have apparently come under global challenges in the current financial year,’‘ R Uday Bhaskar, Director-General, Pharmaceutical Export Promotion Council (Pharmexcil) told BusinessLine.
Since the outbreak of Covid-19, most regulatory agencies could not conduct the audits. The US FDA, for the most part, stopped conducting international inspections impacting the product approvals of Indian companies.
The decline to major export markets notwithstanding, there is a silver-lining to the dark clouds. The price erosion in the US market has been a challenge for Indian exporters for the last three to four quarters.
Positive outlook
However, according to P V Ram Prasad Reddy, whole-time Director, Aurohindo Pharma Ltd, the pricing pressure is expected to ease in the forthcoming quarters. The marginal growth in European and African markets, double digit growth in exports to ASEAN, South Asia, Latin American countries is also a positive sign, say industry sources.
“Many countries have slowly started procuring as inventory reduction is taking place gradually. In NAFTA, there is a potential export opportunity to Canada. India’s production levels have also gone up this year compared to previous finacial year and will be able to meet the rising demands,” Pharmexcil DG said.
Exports in the coming months will be driven by portfolios/product ranges which have seen a fall in exports due to urgent demand for Covid treatment related products.
The product linked incentive (PLI) scheme would also boost domestic production over the next two years.
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