Following sanctions on Russia by the US and many European countries, Russian drug makers are increasingly looking towards Indian pharma industry for supplies. In fact, in a move that could be of advantage to India, Russia has brought in changes to its drug regulatory norms. The Russian Health Ministry recently simplified the drug registration norms for the Russia market to facilitate approval for drugs with clinical trials conducted outside Russia, including India. This makes the process faster.
The Russia-Ukraine war has impacted the Russian economy and the Russian industry and government have started working at measures to ensure the smooth supply of drugs. Pharma manufacturers in Russia are facing a crisis in the supply of both substances and finished dosage forms, as many US/Western firms have announced halting of clinical trial operations in Russia.
“As per a communication we received from Indian Embassy in Moscow, various Russian companies engaged in pharmaceuticals, medical devices and associated equipment are inquiring about supplies from India,” R Uday Bhaskar, Director-General, Pharmaceutical Export Promotion Council (Pharmexcil), told BusinessLine.
According to information available with the Indian Embassy, about a half-a-dozen Russian companies have already sought supplies from India, and more are likely to follow the suit in the days to come. Russian media has been reporting a risk of shortage of foreign as well as Russian medicines going forward.
Russia accounts for 50 per cent of CIS pharma market for India. As per provisional data of the Department of Commerce, Government of India, exports to Russia were at $597 million in 2021-22. “We expected more exports in FY22, but due to war-related disruptions, there is only marginal increase. I’m very positive that our exports to Russia as well as CIS will increase in this FY23,” said Pharmexcil DG.
From an Indian perspective, there are challenges, too. “There is a concern about payments. However, not all banks were under sanctions and we understand that some payments to Indian companies began in Euros recently. But we need to see how this evolves going forward,” said top executive of a Hyderabad-based major drug maker.
A clear picture on Rupee-Rouble transactions and assurance on payments will encourage companies to ship the consignments, according to Bhaskar.