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MAI scheme amendments to benefit pharma exporters – Bhavin Mehta

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Bhavin Mehta, Whole time Director, Kilitch Drugs

The Department of Commerce, Ministry of Commerce and Industry, Government of India, recently amended the MAI Scheme. The MAI Scheme is an intervention by the Government that is expected to catalyse exports, identification of new markets and promotion of export oriented activities for commodities and services. The objectives of the scheme is to promote exports on a sustained basis; to increase market share in existing export markets and reach out to new markets; and to target specific markets through market research.

The scheme provides financial support to eligible agencies to undertake relevant market access initiatives. These include direct and indirect marketing, market research, capacity building, branding, and compliance with statutory requirements of the importing markets. The MAI Scheme entitles Indian exporters to get reimbursed for the expenses incurred in ensuring statutory compliances in the buyer country. These include registration charges for pharma; expenses incurred in conducting clinical trials; bio-equivalence studies; and filing of patents.

Under the existing provisions, each exporter is entitled to reimbursement up to a ceiling of Rs 50 lakh per annum, on a 50-50 sharing basis with the government. Under the new amendment, this ceiling has now been raised to Rs 2 crore per annum, with the same sharing arrangement.

In addition, the amendment includes new components entitled for reimbursement such as plant inspection charges; a one-time grant up to a limit of Rs 25 lakh per small scale exporter to defray actual charges incurred on bar-coding of export consignments.

The European Union has issued a deadline of February, 2019, for compliance with its Falsified Medicines Directive (EU FMD). Pharmaceutical companies have to invest heavily to ensure compliance with overseas markets; the revised MAI Scheme comes at the right time, and will encourage the industry not to shy away from exporting to the EU despite the latter’s stringent controls. India’s pharmaceutical industry ranks 3rd in the world in terms of volume and 14th in terms of value. It is driven by exports to over 200 regulated as well as semi-regulated markets. Yet it is fragmented, with the top-ranking companies accounting for the major chunk of the total sales. This is the right time for all players of the Indian pharma industry to avail of the incentives offered by the government and further strengthen their global presence.

The new scheme will also augment the MSME exporters as it includes bar-coding, product registration and inspection which are quite often expensive. The Indian pharma industry is diversely segmented with over 10,000 SME pharma units. MSME players are an essential part of supply chain for large Indian and foreign MNCs. The revised cap on the funding from Rs 50 lakh to Rs 2 crores will help MSMEs invest more in applying for more registrations and in turn increase India’s pharma exports.

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