Expensive and time consuming product registration procedure and drug import license procurement together with lengthy customs procedures, tough banking formalities, lack of transparency of local markets, inadequate trade related information, unfamiliar intellectual property rights and language barriers are a major deterrents for Indian active pharmaceutical ingredient(API) and intermediate majors to enter China.

Currently, 40 per cent of pharmaceuticals produced in India are for the developed markets and exports to China constitute only 3 per cent. According to the Federation of Indian Chamber of Commerce and Industry (FICCI), Indian pharma exports to China can be increased provided the non tariff barriers (anti dumping measures and countervailing duties) are relaxed.

Several representations have been made to the Union ministries of Chemicals and commerce to simplify the trading situation, stated Anjan K Roy, managing director, RL Fine Chem, a leading Indian API manufacturer from Karnataka.

China dumps APIs, medical devices and other pharmaceutical products into India. This has stymied the domestic market opportunities for medium and small companies. It is the Union government's lackadaisical attitude to encourage imports from China at low registration fee of $2,000 per drug. On the contrary, China's non-refundable registration fee for Indian exports is $20,000 per drug. This disparity is biased, pointed out Roy.

Some of the leading Indian pharma companies present in China according to the FICCI list include Aurobindo Tongling (Datong) Pharma Co. Ltd., Lupin Ltd., Ranbaxy (Guangzhou China) Limited, Kunshan Rotam Pharmaceutical Co Ltd (Dr Reddy's Lab), Jubilant Organosys Ltd and Vam Organic Chemicals.

The Indian pharma sector faces a lot of problems with APIs and intermediates imported from China. The suppliers from China are reluctant to disclose basic information on production practices to the Indian customers who need to assess the quality standards of the product. Rejection of substandard and low quality APIs and intermediates are common.

China is successful only because of its proactive, protective government polices in industrial development. Exports are encouraged and imports are discouraged. Industries are offered ample subsidies for utilities. The basic and industrial infrastructures are far superior giving the country an edge in volume production.

The dragon land is known for its high competence in vast-volume, efficient and cost effective production processes making the end-product offer at an attractive price. It also has a huge talent pool with sound knowledge of chemistry, strong arithmetic reasoning and analytical abilities.

Compared to China, India is also strong on the regulatory front. It has the largest number of US FDA approved plants outside the US. There more than 75 WHO GMP plants recognized for high quality pharma products. India is known for its accurate and systematically documented dossiers for international submissions.

It is high time Indian government recognizes the strengths of the domestic pharmaceutical companies and stop imports of cheap Chinese APIs and intermediates which are already manufactured in India. RL Fine Chem is known for its expertise in the production of an anti malarial drug 'Pyrimathamine'. This same drug imported from China is duty free because it comes under the life saving category. As a local manufacturer, RL Fine is forced to shell out 8 per cent excise duty which puts the company in an uncompetitive situation, added Roy.

According to Vishnukanth Bhutada, managing director, Shilpa Medicare, the APIs from China have started showing low acceptance by customers from India because of low quality and poor regulatory compliance.