In an extensive analysis of the urgent matters confronting India’s pharmaceutical export sector, the Federation of Pharma Merchant Exporters (FPME) has pinpointed pivotal issues that demand swift action. These reforms are essential to streamline business operations and bolster India’s standing as the “Pharmacy of the World.”
Among the major hurdles and proposals laid out by FPME for the fiscal year 2024-25 are complications with customs procedures following ADC clearance. Even after receiving the nod from the Assistant Drugs Controller (ADC), customs officials are requiring additional paperwork, like Certificates of Analysis (COA) and WHO-GMP certifications, which fall outside of their mandate. This, often worsened by the arrival of new officers, causes avoidable delays in shipments. FPME recommends that Pharmexcil work with the Central Board of Indirect Taxes and Customs (CBIC) to establish definitive guidelines.
Furthermore, labeling restrictions pose a challenge to exports. An internal memo from the Central Drugs Standard Control Organization (CDSCO) that limits products labeled “Indian Markets Only” has adversely affected minor exporters and tarnished India’s reputation as a premier pharma exporter, to the advantage of competitors such as Bangladesh and Turkey. FPME has submitted detailed concerns to address these issues.
Another persistent issue is the exemption from Section 43(B) concerning MSME payments. According to Section 43(B) of the Indian Income Tax Act, payments to MSMEs must be made within 45 days, which can be challenging for exporters due to unpredictable cash flows and currency fluctuations. FPME intends to present this issue to the commerce ministry, seeking exemptions for exporters.
Exporters are also burdened by inconsistent and high banking charges, which vary greatly between banks. FPME advises standardizing these charges to enhance competitiveness and offer support to exporters.
The promotion of the Indian Pharmacopoeia (IP) standard abroad is crucial for enhancing the credibility and marketability of Indian pharma products, aligning with India’s ambition to amplify its status as a major global pharma leader. It’s noted that goods labeled Indian Pharmacopoeia are often stopped by port authorities under the pretext that they are for domestic distribution. Yet, these items should be allowed for export as they meet foreign client standards.
FPME also calls for easing testing norms for cough syrups. In reaction to mandatory post-Gambia incident testing requirements, they suggest adopting a risk-based approach, which would lessen the strain on smaller exporters. The existing regulations make small-quantity exports economically unfeasible, even with a 99% compliance rate in testing.
Furthermore, lasting solutions for track and trace compliance are needed. The implementation of Track and Trace systems, delayed due to logistical challenges, requires a definitive resolution. FPME promotes stakeholder collaboration and global benchmarks to create viable strategies to fight counterfeit drugs.
The association is advocating for more efficient import-export procedures at airports as well. FPME recommends direct transfer systems for imported items destined for export to cut down costs and drive efficiency, thereby enhancing business facilitation.
FPME officials have emphasized the industry’s contributions and potential, saying, “We are greatly concerned about these matters and their effects on our industry. With over USD 25 billion in exports, of which 30% is attributed to merchant exporters, there’s an opportunity to double our growth annually if these issues are resolved. India has the potential to reaffirm its global leadership as the Pharmacy to the World. The federation is dedicated to addressing the difficulties faced by its 300+ members, ensuring enduring industry growth.”
In its five-year span, FPME has accomplished considerable achievements. These include obtaining MSME status for trader exporters, advocating for a unified port registration process throughout India, easing export limitations during the Covid-19 pandemic, and increasing merchant exporter representation in the Pharmaceuticals Export Promotion Council of India (Pharmexcil).