The Indian bulk drugs and formulations exports have gone sluggish for past one year, as the industry could record only about 1-1.5 per cent export growth ending 2014-15 financial year. According to Pharmaceuticals Export Promotion Council of India (Pharmexcil), there are several factors that have impacted on the pharmaceutical export growth during the past one year.

Though the industry is not reflecting its growth in value terms, but volume wise this is doing well. And the overall perception of the industry is positive and looking for a good growth in the next two years.

According to Dr Appaji, director general of Pharmexcil, the pharmaceutical export basket of India has undergone a significant overhaul with several regular products coming out and many new products entering into the export category. Not just this, it is also said that many companies are now importing bulk drugs to India and converting them into finished products and marketing them here in the domestic market in addition to transferring it into their subsidiaries in the neighboring and overseas countries. Because of this reason, the products are not considered to be export products but regarded as products of their own manufacturing facilities. Though this is fetching good income in terms of tax for the Indian exchequer but it is not reflected in the export data.

The other important factor that is regarded key for slowing down exports is several overseas companies are now opening up their own offices in India and transferring products from one subsidiary to the other instead of buying it from Indian manufacturers. Here the income that is generated is going under the transfer category and not into the export category. “The major factor which has impacted on the export growth during past one year is probably due to increasing competition from companies of other generic manufacturers’ countries such as Bangladesh, Russia, Vietnam, Brazil and others. But, otherwise the overall sector is doing well and the entire industry is jubilant and many are improving their facilities to cope up with the international regulatory demands. At the same time the industry is also looking at government’s support for performing R&D and developing newer products to beat the competition,” Dr Appaji added.

Last year the industry had achieved an export turnover of Rs.90,000 crore ($15.1 billion), while this year it is expecting a growth of 15 per cent and probably may have crossed Rs.100,000 crore by end of March. “We are yet to get the final figures. What I am expecting is, we may have crossed Rs.100,000 crore by March 2015. Because multiple factors, the sluggishness will continue for one to two years more. For the next two years we are expecting an export growth of 8-10 per cent for the bulk drugs,” said Appaji.