Drug Exports Jumped 29% In October, To Touch $28 Bn In FY24: Pharmexcil

Indian pharmaceutical exports have recorded significant growth in the month of October clocking a 29 per cent hike, said S V Veeramani, Chairman, of the Pharmaceutical Exports Promotion Council (Pharmexcil) on Tuesday in an interview with BW Healthcare World.  

From April to October, India’s drug exports grew by 8 per cent year on year to USD 15.7 billion versus USD 14.5 billion in the same period last year. “In October, the exports jumped by 29 per cent against 5 per cent growth all along this year and due to this momentum, we are projecting that pharmaceutical exports can clock USD 28 billion in FY24,” the Chairman said. 

This upward trend seems to be very positive and will be sustained as there is increased demand for medicines in the US and European markets, Veeramani explained. 

He stated India only provides USD 9 billion or ten per cent of the USD 90 billion demand present in the US market with significant room for growth. The US market prefers Indian medicines over any other country says Veeramani due to its consistent supply of quality drugs to the US. 

The US market has grown by 9.2 per cent between the April to October period this year, said the Pharmexcil chief. He said other new markets such as the Netherlands, Brazil and South Africa have become prime destinations for Indian pharmaceutical exports adding that Brazil comes at number four, Netherlands at number two with South Africa gaining significant ground on the list of top destinations for Indian exports. 

Exports to Russia on the other hand continue to hurt he said with a 10 to 15 per cent dip in exports this year. 

FTAs To Aid Indian Pharma

The Indian government is bullish on Free Trade Agreements (FTAs) as a way to enhance its trade with various key country markets. Veeramani said that the Ministry of Commerce is very busy with FTAs in various countries and one of the products that they have taken up is commodity pharmaceuticals and wherever they are negotiating an FTA - pharmaceuticals are an important offering they give to the countries. 

"There is much focus on removing non-tariff and tariff barriers which will ensure the free flow of goods. The agreement with the UK is in its final stages, said Veeramani adding that India already has FTAs with Australia and UAE with talks ongoing in Europe, Indonesia, Vietnam and Canada," he said.

API’s Remain A Challenge

Indian government's attempt to reduce the dependence on active pharmaceutical ingredients (APIs) imported from China by way of introducing the PLI scheme has been moving slowly and may take up to 5-7 years, experts have outlined in the media. 

As per the Pharmexcil data, India imported USD 3.18 billion worth of bulk drugs from China in FY23 an increase of 1.74 per cent from last year. In FY22 however, the imported APIs had grown by 20 per cent which has now come down to less than two per cent. 

According to the Department of Pharmaceuticals disclosures, the centre has invested Rs 2,543 crores under the PLI scheme in 26 bulk drug projects commissioned till June 2023 against a committed investment of Rs 4,138 crores in six years. 

“APIs in India are not growing owing to challenges such as the lower price APIs offered by China with their low cost of production - the Chinese government offers them subsidised power,  land and water. In India, these are not present on top of that there are too many pollution norms which causes delays in getting approval for a new product,” Veeramani pointed out. The regulators he said need to give out fast approvals without disregarding the pollution norms. 

Future Is In Innovative Drugs

Speaking on innovative medicines he said that R&D budgets of pharmaceutical companies need to go up for the future but the limiting factor today for Indian companies is the lower margins compared to their Western counterparts. 

“In India, there is price control by the government whereas in developed markets, the country competes in copycat drugs with price wars which leads to lower margins for Indian drugmakers. But with all the limitations of the markets, the drugmakers should look at increasing their average R&D budgets from five to seven per cent to 10 per cent going forward,” Veeramani elaborated.

He added that apart from the big companies even small and medium-scale companies should keep some amount of money for research and development activities.