The Union Ministry of Commerce may soon do away with the ceiling on the number of drugs for availing of the reimbursement scheme on drug registration charges paid by an exporter of pharmaceuticals, including biotechnology products. Further, the criteria on minimum turnover may be dropped to help small and medium scale companies tap the global markets.
At present exporting companies with FOB value of exports up to Rs. 10 crore in the preceding year are eligible for MDA assistance as per the revised guidelines announced a few months ago, for which the limit was Rs. 5 crore earlier.
As per the Market Development Assistance (MDA) scheme, currently 50% of the registration charge subject to a ceiling of Rs. 5 lakh for each registration shall be reimbursed to an exporter applying through the Pharmaceutical Export Promotion Council (Pharmexcil), and an exporter is allowed to apply for only five registrations in a year and the total ceiling for each exporter is Rs. 25 lakh per annum.
As per a proposal submitted by Pharmexcil to the ministry, the ceiling on number of drugs could be either discarded or increased, even while the ceiling for each exporter could remain at Rs. 25 lakh per annum. At present, registration charges of a single drug to countries like Russia amounts to about USD 12,500. The ceiling of five drugs causes most exporters unable to get maximum reimbursement for product registrations, though most of the companies market more than 20 drugs in each of the export markets.
Earlier, to avail this incentive, exporters were required to submit registration certificate issued by the concerned health authorities and also a certificate from the Indian embassy of the country where the products are registered, attesting that registration fee has been paid to the concerned authorities. Following Pharmexcil's intervention, this stipulation was relaxed in the revised MDA guidelines. As per that, there is no need to get attestation from the Indian embassy. Registration certificate and receipt issued by registering authorities will be accepted as proof of registration and proof of amount spent respectively.
Talking to Pharmabiz, D B Mody, chairman and Dr. P.V. Appaji, executive director, Pharmexcil said that the Union Commerce Ministry was considering doing away with the ceiling on number of products and the turnover limit criteria from the next financial year, following the recommendations of Pharmexcil.
They said that MDA was now available to the exporters even when they participate directly in the exhibitions and buyer-seller meetings abroad, provided they take prior approval (15 days prior to the date of event) from the council. Members having export turnover less than Rs. 10 crore per annum in the preceding year and 12 months membership with the council are now eligible to get reimbursement towards stall charges up to Rs. 50, 000 (60% of actual paid) in all countries. In case of focused areas, 90%/75% of airfare, for one person, also would be reimbursed. However, MDA assistance is not available for visiting the trade exhibitions, various countries on their own for export promotion of their products, they informed.