With the sluggish global economic outlook causing a decline in pharmaceutical exports for the current financial year, the Ministry of Commerce, in consultation with the Department of Pharmaceuticals and the Planning Commission, is planning a special initiative to support upgradation of infrastructure and capacities as a medium-term measure.

Apart from policy intervention in the API Sector to strengthen bulk drugs manufacturing in India coupled with export of formulations to China, the Department is learnt to be negotiating with the Planning Commission and the DoP to launch a scheme for venture capital fund to support R&D efforts. According to the Department, venture fund is needed to meet the financing needs which cannot be supported through traditional bank credit system.

According to the assessment of the Department of Commerce, the pharmaceutical exports will fall short of at least 30 per cent of the target set by the Government sometime back when the economic outlook was strong. As against a target of US$ 25 billion for 2013-14, it is estimated that only US$ 17 billion can be achieved i.e. nearly 70 per cent of the target.

The reasons for the shortfall as per the Commerce Department are inability of India to spread its exports from the existing basket in the highly evolving pharma market, recession in Europe and Indian rupees devaluation at unexpected rate, among others.

Some of our major export partners in LAC, CIS and Africa regions have started initiating process of indigenous production in a bid to achieve self reliance and China's increased competition even in formulations sector especially in Europe, are some of the factors. CIS countries, some of the LAC countries & African countries are initiating self reliance in Pharmaceuticals. Russia is restricting direct imports through various methods. Brazil has been doing so for the last one year. Nigeria has imposed restrictions on imports of pharmaceuticals which are being made in the country despite the fact they are falling short of demand. Mexico has been imposing NTBs to reduce imports. India's exports to China have been continuously slipping, according to a strategic paper prepared by the department.

Among the immediate tasks, the Department has called for maintaining and enhancing market share where India's presence is already robust such as the North America, European Union and Africa. Even within groups of countries such as European Union and Africa, identify those countries where the rate of growth and market share have been substantially low, it said.

Use opportunity available in Japan and government intervention required through the recently concluded CEPA. Indian dependence on bulk drugs from China also needs to be reduced. Pharmaceutical sector is a knowledge based industry and requires different support in comparison to other commodities. Pharma industry was not provided any specific new concessions during the last three years, and requires specific government intervention for market access and strong regulatory support. Indian pharma industry needs to improve the composition of production/ export basket in India, the paper said.

The Department has pointed out that India need to tap the global contract research manufacturing opportunity worth US$ 44 bn as of 2013-14. The country has to seize chances in new drug delivery systems, tap the potential in the biotech market including, including monoclonal anti-bodies, and complex API. Another opportunity for India is in area of drugs going off the patent in the next five years (of US$ 100 billion value), the department said.