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‘Urge GoI to take strong steps towards ensuring availability of skilled manpower, electricity, water, infrastructure’

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SEZ’s pain

TIL Healthcare has set-up a state-of-the-art facility at an SEZ in 2010 with a focus on export. However, two years down the line (after completion of the project), the Government removed 100 per cent tax incentives on units set-up in an SEZ and introduced MAT on the same. This is despite the fact that the investment was a fresh investment and not a shift from one facility to another.

For an SME that has set up a high investment pharma plant in a SEZ scheme, having retrospective tax implications for investments hurts the most. One of the most important initiatives that TIL would expect is to reverse such retrospective tax implications, which ultimately discourages SME’s from larger investments.

With a strong manufacturing capability, companies are looking to diminish the perception that India makes ‘cheap drugs’. But this requires constant upgradation of the facilities / capabilities of the companies. SME’s should be incentivised through fair financial support/incentives for upgradation of such facilities that are meant to meet global standards. This will help mitigate these wrong perceptions given the current stringent regulatory standards expected in even the poorest of developing countries.

Faster platforms to grow

Today, challenges of any industry are related to infrastructure of the country and the rising costs attached to the lack of such infrastructure. This is making companies cost-ineffective thereby making countries like Vietnam and others more cost effective. Along with this, the high costs attached to the difficult regulatory environment (both within and outside the country) is posing a challenge to SME’s.

Having said that, TIL’s initiatives have always been towards ensuring a strong manufacturing capability to ensure delivery of quality products and services through its facilities. It is almost impossible to get the right amount of skilled labour, electricity or its lack of continued availability is a major hindrance and the lack of port infrastructure towards fast / efficient turnarounds causes a significant strain in the functional working of any company. The platform for manufacturing in India is slowly losing it sheen and we would humbly urge the Government of India (GoI) to take strong steps towards ensuring availability of skilled manpower, electricity, water and infrastructure.

SMEs need attention

Today over 80 per cent of TIL’s formulation sales is through its own brands marketed in various countries. TIL is involved in strong OTC marketing done through radio, television, print, billboards through its teams based in various countries. We believe that this enhances not only the image of TIL and its brands, but also the image of India as a hub for quality products.

Selling branded formulations requires a significant amount of marketing investment and initiative in global markets towards acceptance of Indian products and further, making them prominent through OTC marketing. As an SME, financial incentives from the Government of India towards such initiates would immensely benefit SME’s in further taking larger initiatives towards building the ‘India Story.’

The focus market scheme did encapsulate this, however, it was surprisingly not available to SEZs even though this scheme was meant to help companies increase exports. The focus market scheme should be extended to SEZ’s as well, specifically for companies that are involved in formulation sales, which is far more tougher/stringent (both to market and to meet regulatory compliances) as compared to bulk drugs. To further mitigate such perceptions, GoI should encourage the setting up of laboratories across the states towards ensuring that quality medicines are offered. This should be made mandatory for all such imports of bulk/finished products to ensure material used is of the best grade thereby ensuring a quality product.

Kapil Jhaver, President & Managing Director, TIL Healthcare

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