No one can stop Indian pharma exports

Kamlesh Shah, President and Sandeep Modi, Joint Secretary, Federation of Pharmaceutical And Allied Products Merchant Exporters (FPME) explain to Viveka Roychowdhury why pharma merchant exporters are brand ambassadors for Indian pharma exports, and the policy changes required to tackle the challenges posed by countries like Bangladesh, Pakistan and Vietnam, which are getting stronger with a competitive edge

What was the background and objectives behind the formation of the Federation of Pharmaceutical and Allied Products Merchant Exporters (FPME)?

The idea to form the association was cemented in June 2018, spurred by the improper attempts to implement Track and Trace (Barcode) system. After several meetings, the modalities of formation were finalised and the association was finally formed on 30th March, 2019 under the Companies Act with the Board of Directors comprising the two of us along with Ashish Shah, Abhay Shah, Yogesh Doshi, Niren Shah, and Hemil Shah. The association sees merchant exporters as brand ambassadors for Indian pharma exports, who serve humanity by serving affordable medicines to the needy.

Today, FPME has more than 200 members, a strong managing committee, with Gujarat, Delhi and Chennai chapters operational.

An exclusive window for merchant exporters was created with the help of Pharmexcil during DAVA portal regime of bar code implementation. The association also has an active B2B WhatsApp group benefitting members.

FPME has worked with Pharmexcil to resolve the ban on various molecules, from paracetamol to remdesevir and enoxaparine during COVID times. They have also successfully represented MSME Ministry for inclusion of merchant exporters as MSMEs.

They have represented Ministry of Chemicals and Fertilizers, Ministry of Finance for non-inclusion of the pharma sector under RodTep. They have also represented members to custom officials for timely issuance of drawback/IGST refund whenever it has been held for technical reasons.

The FPME also organised webinars to educate members on topics ranging from GST Refund, FEMA regulations, CBN Procedures for exports of narcotic and psychotropic substances and marine insurance/ECGC procedures.

A regular quarterly bulletin is published, and as a common platform, the FPME ensures a common quality control mechanism, affordable banking and affordable, effective, speedy logistic solution to members.

The FPME is trying to put together a mechanism for capacity utilisation and matching requirements of merchant exporters as well as a joint mechanism to authorise exports from reputed pharma companies. The association aims to build a strong B2B/C platform exclusive for pharma trade, which will have international buyers also. FPME also aims to promote the Indian Pharmacopoeia (IP).

On the humanitarian side, FPME has organised Vitamin C, PPE and masks for customs and port workers.

What is the percentage share of India’s pharma exports handled by
merchant exporters?

The total pharma exports for FY19 were $19132.5 million, out of which merchant exporters contributed approximately $6700 million. Thus, merchant exporters account for around 35 per cent of the total exports. Even though there are more than 2,000 merchant exporters across India, there is no single representative body. Most merchant exporters have a distribution background or are startups who have quit the industry and require support.

What is India’s rank as a global pharma exporter?

India is placed 12th in the world in terms of pharma exports.

Which are the areas where India is considered best placed as a reliable and cost-effective exporter?

Formulation is India’s strength, as the world can rely on India for all the latest molecules, be it biosimilars, vaccines or the latest NDDS. India serves the world in a cost-effective manner without compromising quality. The recent development of quick COVID vaccine and its large-scale production is the best example. Having said this, the recent push for competitive API manufacturing, instead of imports from China, will take India to new heights.

While exports of Made in India COVID essentials, including medicines, were a humanitarian response during the pandemic, what were the challenges faced by exporters, for instance, on the supply chain, availability front, etc.?

The inconsistent policies by DGFT like the ban/restriction imposed for export of certain COVID drugs, without taking exporters into confidence, was a major challenge. Costs of logistics went haywire in these days and it is still on the higher side. On the availability front, there was no big challenge, except for remdesivir, which was a challenge in April 2021.

Were those addressed in time?

Not exactly, but as we say in Hindi, der aaye durust aaye (better late than never).

What was the role of FPME and other associations in addressing these concerns?

FPME, along with Pharmexcil, played an important role in taking up these issues to DGFT as well as CDSCO and the Department of Pharmaceuticals (DoP), which resulted in the removal of these restrictions.

What about some apprehensions on short supplies of these medicines in India, due to export commitments?

This is like doubting India’s strength. As said earlier, none of the medicine was in short supply, with the exception of remdesevir and amphotericin-B in April 2021. However, this was also regularised soon by India’s manufacturers.

What is the outlook for pharma exports from India?

Pharma exports from India will grow multiple-fold postCOVID as the world has witnessed India’s capacity to deliver affordable quality medicines in troubled times, especially where they have more faith in India than China.

The major challenge we foresee is that countries like Bangladesh, Pakistan and recently Vietnam, are getting stronger with a competitive edge. But, if we resolve to deliver and fill the loopholes, be it issues in the government policy or with individual exporters, no one can stop Indian pharma exports.

What are the policies which FPME is working on with the government of India to encourage pharma exports?

FPME is working on major policies like promoting Indian Pharmacopoeia, as it should be made mandatory under every individual trade agreement with individual countries to accept goods manufactured under IP.

Another policy matter we are working on is that bar codes, track and trace should be mandated only after universal implementation.

With no major incentives, the government should ask banks not to charge exporters for their foreign exchangerelated services. We feel that merchant exporters should benefit from the interest equalisation scheme.

Freight equalisation mechanism should bedeveloped in case of high volume, low value goods exports, or government should now interfere to reduce container as well as air freight.

FPME also suggests that to support MSMEs and enhance risk appetite, Export Credit Guarantee Corporation Limited (ECGC) or credit insurance premium should be minimalised and should be zero when supplying to international government agencies.

In the case of customs, FPME is working with the government on single port registration, lesser turnaround and avoiding duplication of documentation.

Federation of Pharmaceutical and Allied Products Merchant ExportersFPMEIndian pharma exportsKamlesh ShahSandeep Modi
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