The Centre is planning to exempt export oriented drug units (EOUs) in Special Economic Zones (SEZs) in the country from many licensing requirements including import license and import registration. As part of the government''''s incentive programme for the pharmaceutical exporters, it will also introduce a host of relaxations in the Drugs and Cosmetics Rules in order to facilitate easy and better operations for the drug-manufacturing units operating in the SEZs.

As per the proposal of the Union government, the drug EOUs would also be free from the Rules, which restricts them to import raw material requirements through notified ports of entry in India, provided the imported items are meant for value added exports.

The Union Ministry of Health and Family Welfare which has already released a Draft amendment to the Drugs & Cosmetics Rules regarding these exemptions SEZ drug units from the provisions of chapter III of the D&C Act and of the rules made there under in respect of drugs for export.

However, the Ministry has invited comments from the industry on the amendments. The suggestions have to reach the Ministry of Health and Family Welfare before October 21, 2002.

The government has inserted "drugs imported for manufacture and export by units situated in "special economic zones" as notified by government of India from time to time" as a sixth item in the "class of drugs" in schedule D of D&C Rules 1945. According to this, the extent and conditions of exemptions states that the "provisions of chapter III of the Act and Rules there under which require them to be covered by an import license, import registration and import through notified port of entry," are exempted subject to "the conditions that these drugs shall not be diverted for sale in the country. "

The other classes of drugs that come under schedule D are ''''substances that are not intended for medical use'''', and a host of items which are used both as articles of food as well as drugs.