Indian Drug Manufacturers Association (IDMA) has objected to the recent circular of the Director General of Foreign Trade (DGFT) stating that the exemption from the mandatory import registration procedures under the Advance Licensing Scheme is subjected to a pre-import condition. The IDMA lamented that this prerequisite is inappropriate in today's competitive export scenario.

The IDMA sources said that though the government decision to exempt export oriented imports from the registration procedure is a welcome step, fixing a condition like this is neither in the interest of the exporters nor in the national interests as the current thrust is to increase exports substantially in the field of pharmaceuticals.

As per the Circular 9 from the DGFT dated June 30, an exporter should apply for an import license under Duty Exemption Scheme only after receiving export order, thereby arranging the imports before being able to execute the export orders.

According to IDMA, in the current international environment where the exporters operate today, no buyer will wait that long for execution their orders. "Rather, the international buyers who have placed the order with the Indian exporters would be compelled to source their requirements from the competitors," says D B Modi, chairman, International Trade Committee, IDMA.

In a letter addressed to L Mansingh, DGFT, the IDMA President Yogin Majmudar has pointed out that since the fresh condition in the Circular would cause a delayed execution of export orders, it will obviously lead to serious setback to the country's pharma exports and consequently the entire operations will be adversely affected thereby making the industry's investments largely unproductive.

Further, there could be situations where, after effecting imports under the pre-import condition, due to inherent delays involved in complying with this procedure, the buyers may be compelled to cancel their orders. In such cases it is not clear that what is the remedy for such license holders in respect of the avoidable problems arising out of this, he asked in the letter.

The IDMA letter to the DGFT stated that in view of the forgoing, and despite the intent of being helpful, the above policy circular would not provide hassle free operations for exporters, which the Association sought in its representation for exemption from mandatory registration of imports under the Drugs and Cosmetics Act while operating under the Duty Exemption Scheme.