After strong recommendation of Indian embassy to strengthen the export activities to Afghanistan, Pharmaceuticals Exports Promotion Council of India (Pharmexcil) is all set to launch some major initiatives in that country. The Council has called upon the industry to actively come forward and invest in projects in Afghanistan to tap the huge market potential there.

This move comes at a perfect time when the Afghanistan government is all set to introduce measures to encourage pharma industry locally. In fact, the Afghanistan government is reportedly planning to reduce the tax on imported pharmaceutical raw materials from 9 per cent to mere one per cent.

Similarly, measures are also taken by the government to impose 40 per cent additional duty on the import of those pharmaceuticals that can be produced by the local industry. At the same time, to lure investment into the country, the government has decided to provide free of cost, land to all the investors who sets up pharmaceutical unit in Afghanistan before 2014.

According to Dr P V Appaji, director general of Pharmexcil, this is a perfect opportunity for the Indian manufacturers to not only boost their exports to Afghanistan, which has most of its business coming from Pakistan, but also to set up their bases in that country.

“Ministry of commerce is keenly interested in strengthening the business relation with Afghanistan especially, with all the proactive steps taken by the government there for promoting the pharma sector. Considering these factors the Indian cos should look into the possibility of exploring business operation in Afghanistan. We are awaiting their response so that the Indian government can take appropriate measures to spur the initiatives,” stressed Dr Appaji.

India’s export to Afghanistan was US$ 45.38 million in 2012-13 whereas it rose to US$ 48.60 million in 2013-14. Category wise exports of Ayush products were US$ 0.11 million in 2012-13, which saw a slight rise in 2013-14 by US$ 0.25 million. Whereas the bulk drugs exports in the year 2012-13 was US$ 1.29 million while in 2013-14 is US$ 1.65 million. For formulation it was US$ 43.85 million in 2012-13 while in 2013-14 it was US$ 45.49 million; herbals saw exports of US$ 0.13 million in 2012-13 and US$ 0.16 million in 2013-14. While for surgicals the exports went from 0 to US$1.05 million.

He said that although actual size of the industry in Afghanistan is not verified it is estimated to be somewhere between US$ 400 million to $800 million. However, it is understood that more than 95 per cent of the requirement is met by way of imports mainly through Pakistan. In fact some reports suggest that a significant part of the requirement of Afghanistan is met through unofficial routes.