The National Bank for Agriculture and Rural Development (NABARD), with an assessment of current credit potential to the tune of Rs 541 crore annually in the medicinal and aromatic plant sector, has extended refinance to an extent of Rs 14.60 crore, and has asked the retail banks to increase credit flow to this sector.

Considering that the sector has been identified as a 'thrust area' for development by NABARD, refinance is being extended to the extent of 100 per cent of the loans provided by banks at the rate of interests on refinance ranging from 6 per cent to 6.25 per cent per annum.

Dr P Renganathan, NABARD, AP Regional Office, informed, the Bank has recently issued a circular to all banks advising them to enhance the flow of credit to this sector. A list of 40 commercially important species of medicinal plants with indicative model economics was also sent. It also conducted few sensitization programmes and workshops for officials of financial institutions.

In Andhra Pradesh, 13 medicinal plants and aromatic plants have been short-listed in consultation with AP Medicinal and Aromatic Plants Board and their scale of finance or unit cost was circulated to banks for facilitating credit flow for this sector. Potential linked credit plans prepared for the state has estimated the investment credit potential for cultivation of medicinal and aromatic plants as Rs 10.5 crore for the year 2005-'06, he added.

Addressing a gathering at a national seminar on herbal industry organized by the Federation of Andhra Pradesh Chamber of Commerce and Industry (FAPCCI) at Hyderabad last week, he said, about 80 per cent of the world's population depends on botanical source for their medical needs. It is estimated that about 25 per cent of the drugs in the modern pharmacopoeia are derived from plants. According to EXIM bank report of 2003, 48 medicinal plants and aromatic plants are exported and 42 species are imported by India. The top 10 traded medicinal plants in India are Amla, Satavari, Aswagandha, Bael, Senna, Vasa, Harar, Asoka, Long Pepper and Brahmi.

The WHO has projected that the global herbal market will grow to US $ 5 trillion by 2050 at a growth rate of more than 20 per cent per annum from the current level of about US $ 100 billion. As per an estimate, the Asian countries together account for 19 per cent of the global market. While Chinese exports based on plants, including raw drugs and therapeutics is estimated to be about Rs 20,000 crore and that of Thailand is Rs 10,000 crore. India at present occupies only 0.5 per cent of the world trade, he mentioned.

India is one of the major exporters of crude drugs mainly to six developed countries such as the US, Germany, France, Switzerland, UK and Japan. About 70 per cent of Indian herbal exports are in the form of crude drugs and extracts and the remaining 30 per cent is in the form of finished products. By 2006-'07, it is estimated that the export level would touch US $ 370 million, of which US $ 259 million can be finished products and US $ 111 million can be crude drugs and extracts.

He added, the market size of plant-based drugs in India is about Rs 43 billion in addition to annual export of about Rs 3 billion, mostly through export of isabgol, senna and other raw herbs. According to an estimate of Planning Commission, Govt of India, potential for plant based crude drug exists for Rs 400 million. A Task Force constituted by the Planning Commission has laid out strategies to improve export of herbal products to the tune of Rs 100 billion by 2010, besides meeting domestic needs.