FTA with Peru: India may have to lower import duty on drugs

India may have to lower the import duty on pharmaceuticals for Peru in the discussions on the proposed free trade agreement (FTA) with the South American country.

The Centre has sought industry opinion on the matter, according to a communication to the Pharmaceuticals Export Promotion Council of India (Pharmexcil).

“Currently, Peru does not impose any duty on our bulk drug exports while we impose 7.5 per cent duty on their exports, if any, of the same to India,” Udaya Bhaskar, Director-General, Pharmexcil, said in circular addressed to the industry.

Peru, however, imposes 6 per cent duty on imports from India on some of the finished dosage formulations and imposes no duty on the rest.

Negotiations could also be made to reduce the present 6 per cent to zero on finished dosages exports also, Bhaskar said.

India is imposting the same duty structure on most of its major importing partners, especially China.

The country’s pharmaceutical exports to Peru stood at $51 million in 2016-17, with the lion’s share being drug formulations and biologicals. India has no imports from Peru at present.

“However, any negotiations with Peru (about lowering our import duty from the present level) might indirectly benefit any of those countries with which Peru has an FTA as they can export through Peru, availing those benefits,” Bhaskar pointed out.

Keeping in line with the global trend of forging FTAs, Peru is also simultaneously entering into agreements with various countries including China, Colombia and Mexico, some of which are strong manufacturers of drugs.