Against the backdrop of issues the Indian API industry has been facing and further compounded by imports from China and shutting down of manufacturing units due to stringent environmental norms, the Indian Drug Manufacturers Association (IDMA) has urged the government to ease certain bottlenecks with respect to environmental norms and incentivise exports by arranging soft loans for companies towards capacity building and upgrading their facilities to international regulatory standards similar to what is done in China.

Among the submissions made to the government include allowing change of APIs without any change in effluent quality/quantity to be allowed by self-declaration, which at present is not easily accepted by State Pollution Control Boards (PCBs). Similarly, increase in production by technological improvement without increase in effluent load needs to be not only be permitted but should be encouraged.

Other submissions are that API units having “zero discharge” need to be given special treatment by allowing increase in production/change of product mix as long as they continue to maintain “zero discharge” status. Financial support for ETP upgradation by way of subsidy plus interest subvention should be provided.

Hazardous waste rules do not permit sale of spent solvents. API industry is forced to dispose off spent solvents as hazardous waste to only selected units instead of getting return on sale.

IDMA has also prepared a ‘White Paper on Journey Towards Pharma Vision 2020 and Beyond’ highlighting how API industry can recover and confidently move ahead to claim its rightful place as the source for quality APIs.

For the long term sustainability of industry competitiveness, it is important that the pharma industry spends requisite capital on R&D and IPR generation. Also, from a healthy long term growth of the Indian industry, it is imperative that the Indian API invests consistently in product development. However, due to cash flow concerns and limited help from the lending community in this aspect, investment in research and development continues to lag.

Other issues that need to be addressed are that bankers and other lending institutions do not recognize the risks and reward equation in setting up a regulated market project and do not differentiate between a capex for regulated market and domestic consumption as there is a lack of project appraisal skills in the lending institutions for evaluating projects for exports for generics to developed markets.

Foreign currency loan availability (Foreign Currency Packing Credit) for working capital is scarce and in many cases not available. This is especially crucial as competitors in other countries have access to far cheaper credit and are more competitive as compared to Indian companies.

Exports to Africa, CIS & ROW markets have been a crucial growth driver for the sector. Many a time, these markets (especially Africa) tend to be viewed skeptically by the lenders and are classified as ‘high risk’ and discouraged. Banks should avoid discouraging of exports to these markets as they continue to present good commercial opportunities for Indian pharma industry.

India’s exports of pharmaceuticals to Africa has been consistently increasing. Indian companies have gone one step further and are assisting African companies in promoting domestic manufacturing. As suggested by Commerce Ministry and supported by Department of Pharmaceuticals (DoP) in their communication to Ministry of External Affairs, IDMA urges that Ghana, which has shown keen interest, be requested to recognise Indian Pharmacopoeia which will pave the way for other African countries to do the same. This will boost exports and facilitate the way for more small and medium enterprises (SMEs) to take up exports to these countries.