It has long been an objective of successive governments to enhance India’s manufacturing sector through a variety of strategies, ventures, and programmes. However, the most notable is the ‘Make in India’ initiative. While the effort was laudable, it remained a step back in yielding the desired results for our nutraceutical industry and for the country’s manufacturing sector at large. In fact, production remained stagnant at 17-18 per cent. However, there are multiple reasons to be optimistic with the initiative, despite the Covid hit the economy has taken.

The Prime Minister’s Atmanirbhar Bharat programme holds much promise as it is accompanied by policy shifts. The tumultuous events of 2020 and disruptions to global supply chains finally drove these changes.

With a fundamental objective of self-reliance and self-sufficiency, the country now has an opportunity to grab a larger share of the rapidly growing nutraceutical market. Moreover, fiscal incentives for nutraceutical manufacturing will also help in exports. The Indian nutraceutical market is growing at a staggering rate and is set to leave some of the present giants behind in the next few years.

Before the Covid pandemic, the nutraceutical industry was booming due to the growing awareness about the importance of nutrition in an increasingly health-conscious population. In fact, the nutraceutical market was projected to grow to about $18 billion by 2025. However, supply chain disruptions and the closure of retail stores as well as e-commerce platforms had a huge impact on growth and revenue forecasts.

Wake-up call

This turned out to be a wake-up call, as it exposed the dependence of our markets on China as well as global supply chains. Though the impact of this was most felt by the pharma industry, the nutraceutical sector was also affected as nearly 70 per cent of active pharmaceutical ingredients and key starting materials come from China. Despite the setbacks, the nutraceutical industry has bounced back and is in good shape. With the pandemic still raging, there is renewed interest in nutraceuticals, especially supplements that boost immunity. The global nutraceutical market is estimated to grow by as much as $180.38 billion, over the next four years — a CAGR of 7.5 per cent.

India’s greatest strength is its colossal consumer market, but a large share of it has been claimed by international brands. Cheaper imports, especially from China, and a lack of trust in Indian manufacturers are among reasons for this. The Atmanirbhar programme does include and encourage policy shifts that address these concerns.

One of the most interesting developments is the introduction of the Production-Linked Incentive (PLI)scheme. This initiative should provide a boost to the nutraceutical sector, including on the export front. .

PLIs that benefit sectors like farming and agriculture will ultimately benefit the nutraceutical industry, too. India enjoys the advantage of having large tracts of agricultural land, abundant labour supply and a strong farming culture. To take advantage of changing market trends, the industry needs to invest heavily in talent and technology as so as to drive innovation in the sector. Additionally, supply chains will need to be strengthened.

In order to fulfil the Atmanirbhar mission in the nutraceutical sector, there’s a desperate need for a separate regulatory authority as there is still a lack of clarity for manufacturers and, therefore, a trust deficit amongst consumers when it comes to nutraceutical products. Additionally, an independent HSN code, specific financial packages, and reforms/changes in tax structure to promote manufacturing as well as research and clinical studies are required.

The year 2020 may have been a bad one for the markets, in general, but it could be just the shock that the system needed.

Hopefully, the lessons from this pandemic will not be forgotten soon and the Atmanirbhar mission will help our industries better withstand future shocks.

The writer is CEO & Director at Purenutrition.in

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