In order to boost the export of active pharmaceutical ingredients (APIs), the Union government has relaxed input-output norms for drugs manufactured with non-infringing processes.
Under the foreign trade policy, the Directorate General of Foreign Trade (DGFT) fixes Standard Input-Output Norms (SIONs). According to it, the consumption of raw materials in any exported bulk drug was calculated and duty exemption provided. However, there are certain raw materials, which the Indian exporters cannot manufacture through normal manufacturing process because such processes are still protected by process patent in the regulated markets. It compels exporters to develop non-infringing process for the manufacture of such bulk drugs.
Talking to Pharmabiz, Dr P V Appaji, executive director, Pharmexcil, said, “When an exporter develops non-infringing processes the raw material consumption is generally higher and thereby the duty suffered by the exporters are more compared to the standard input-output norms. It is particular in the case of bulk drugs exported to regulated markets and there is huge supply of bulk drugs to regulated markets such as the US and Europe.”
He added that in order to encourage export of bulk drugs manufactured through non-infringing process, Pharmexcil has taken up the issue with the DGFT. Even though the government was not keen to take up it separately, Pharmexcil has taken up the issue and followed up with DGFT for promotion of export of bulk drugs. The government had held several rounds of discussion with inter-ministerial groups and Pharmexcil and also the industry and developed a mechanism. Under the mechanism the government will verify the Drug Master Files (DMF) filed by companies with the particular country. As per the relaxation, companies whoever is consuming high quantities of raw materials will have the benefit of duty savings to that extent.
It is learnt that the relaxation will enable exporters to offer their products in competitive prices in regulated markets. Bulk drugs contribute 42 per cent of total pharmaceutical exports of the country. The share of bulk drugs manufactured under non-infringing processes is five to ten per cent of total bulk drugs export.