Pharma exports back on track!

Overall export target for the financial year 2021-2022 for the pharmaceutical sector may fall short in terms of annual target of $29 billion given that the first nine months of the fiscal year could only achieve just above $18 billion exports

After three months of consecutive decline, the pharmaceutical exports from India are back on track in the month of December 2021, with a modest growth of 5.2 per cent.

According to data available with the Pharmaceuticals Export Promotion Council of India (Pharmexcil), the pharmaceutical exports have again taken a turn for its northward journey after three months of journey towards the south. Data shows that the pharma exports during the month of December 2021 have registered a modest growth of 5.2 per cent to $2.32 billion as compared to $2.2 billion in the same month last year. Before that, in the three consecutive months of September, October and November 2021, exports of pharmaceutical products from the country had registered a decline with exports falling by 8.45 per cent, 0.88 per cent and 7.03 per cent respectively, compared to the corresponding months of the previous year.

Meanwhile, experts are of the view that the overall export target for the financial year 2021-2022 for the pharmaceutical sector may fall short in terms of annual target of $29 billion given that the first nine months of the fiscal year could only achieve just above $18 billion exports. For the first nine months of this fiscal year till December 2021, the total exports of drugs and pharmaceuticals registered a marginal growth of 0.62 per cent to $18.18 billion as compared to $18.07 billion during April to December 2020.

Meeting the target of $29 billion for this financial year looks well nigh impossible as it will be very unlikely to export almost $11 billion of pharma products in just one quarter. With just one quarter left in this fiscal year and the last three quarters could achieve just above $18 billion of total exports, the target of $29 billion looks a Herculean task. Given the current trend, the industry looks to the export similar to last year and achieve around $25 billion in 2021-22 too, industry experts say.

For the Indian pharmaceutical industry, the financial year 2020-21 was an entirely exceptional year as it reported an impressive growth of 18.19 per cent to $24.47 billion. This is after eight years that the industry has reported such a stellar performance. As the pandemic raged through the world last year, there was a real scramble for drugs and other pharmaceutical products. The Indian pharmaceutical companies rose to the occasion in supplying drugs and other pharmaceutical products to every nook and corner of the world, thus registering an impressive export growth.

Before the exceptional performance of 18.19 per cent growth in the year 2020-21, the pharma exports have been going through a bad patch as it could achieve only 2.92 per cent growth for the financial year 2017-18, at $17.28 billion. The year 2018-19 has seen a growth of 10.72 per cent to $19.13 billion compared to the previous year. In 2019-20, the pharma exports registered a growth of 7.57 per cent to $20.58 billion, before hitting an eight year high of 18.19 per cent growth to $24.47 billion in the year 2020-21.

But, during the first three quarters of this financial year, pharma exports have been impacted due to various factors including multifold increase in freight rates and a decline in exports to the US owing to the pending regulatory inspections in Indian sites by the US Food and Drug Administration. Besides, some of the pharmaceutical manufacturers in Japan and Europe have also revived their pharma business during the Covid-19 period and started supplying to the US, which is another factor that has impacted the Indian pharma exporters. Some of the warning letters issued by the US drug regulator also impacted the exports to the US market.

On the import front, the country is witnessing a quantum jump as in December 2021, the pharma imports have seen a growth of 19.32 per cent to $743.89 million as compared to $623.44 million during the same month of last year. For the first three quarters of this financial year till December 2021, the pharma imports grew 31.7 per cent to $6.9 billion as compared to $5.25 billion during the same period of last year.

(The author is a freelance journalist with varied experience in different fields)