The pharmaceutical exporters in the country have urged the central government to announce a new package to tide over the crisis arising out of the unprecedented devaluation of currencies across the importing countries, including Russian Rouble, Ukrainian Grivna and South African Rand, against the US dollar during the last some months. All these currencies have depreciated around 40 per cent during the last three months.

In a letter to Union commerce minister Kamal Nath, Pharmexcil's panel chairman (foreign trade policy) DB Mody said that due to rapid devaluation of currencies in importing countries, the cost of medicines is rising dramatically and the governments in the importing countries are not permitting to increase the prices in line with the depreciation of local currencies. Hence, importers/distributors are pressurising the manufacturers/exporters to maintain parity wit the earlier prices in local currency equivalence, thereby forcing reduction in Dollar prices.

Though Indian Rupee has also lost value vis-à-vis US dollar, industry has not been able to take full benefit in rupee terms because in order to protect its export earnings from rapid appreciation of rupee, which at one stage was quoted at Rs 38 against one dollar and expected to fall further to Rs 35, the exporters had taken forward cover for all bills for shipments made in the previous month, thus incurring huge losses due to the subsequent devaluation of Indian rupee.

Due to the unforeseen devaluation of the local currencies, the importers are incurring massive exchange losses and are unable to remit the proceeds to export bills. In fact, they are demanding to give credit notes for exchange losses which will lead to commercial losses to the exporters.

Urging the commerce ministry to take up the matter with the Reserve Bank of India, Mody suggested some measures to tide over the crisis. 'In case of SEZ/EOU exports, the value addition is just positive over the five-year cumulative period. Therefore, to give reduction in invoice value, their entitlements are not affected. They have enough of time for adjustments & several options to ensure the positive value addition'.

"The exporters under advance authorisation/duty free import authorisation also do not lose because here again the value addition requirement is just positive," Mody in his letter said.

In case of DEPB, the entitlement is FOB value dependent. Therefore if the FOB value realisation in foreign currency is lowered, then the entitlement value decreases and the exporters suffer a huge loss. Therefore, there is a reason to take care of the exporters under the DEPB scheme, Mody said and suggested that reduction in value may be allowed upto actual exchange loss compensated to the importers without affecting the entitlement quantum.