The Brexit effect
Brexit is finally a reality and though India Pharma Inc expects some glitches in the short-term, it is optimistic about its impact in the long term and is looking forward to lucrative trade agreements for further growth in both, the UK and the EU markets
Movement of products from the UK to EU and back may create some supply chain issues
The UK is the second destination for India in doing export of formulations and APIs. Post-Brexit, I do not see much impact on exports, but it may create some hurdles in regulatory approvals. UK MHRA approval was either accepted or there used to be a smoother process in getting EU regulatory approvals in the majority of EU regions and vice versa. The movement of products from the UK to the EU and back may create some supply chain issues for Indian exporters. Brexit has been announced long back and only the implementation is pending. Most of the Indian exporters already have a strategy in place considering the long lead time available for Brexit to happen.
There will be not much effect on exports to the UK or the EU
From a merchant exporter perspective, there will be not much effect on exports to the UK or the EU. In fact, with additional investments expected in the UK as well as the EU, we are looking ahead to a positive impact on the overall Indian pharma industry.
The Indian pharma majors are relatively less dependent on revenue from the EU or the UK, so it will not have a major impact on revenue, but yes, supply chain management and regulatory compliance, will be a challenge in the short run. This may cause short term impact on revenues of the companies which are heavily dependent on the EU or the UK if they do not have a trade deal in place. The relationship between suppliers, distributors and third party customers need to be revisited, and a fresh regulatory policy between India-UK and India-EU regarding marketing authorisation for pharma products may be required. On the other hand, if a conducive deal is done, we look forward to a great opportunity for the Indian pharma industry, both in the UK as well as the EU.
Post-Brexit, partnership between India and UK will strengthen on various fronts
As per our understanding of Brexit, we do not expect any adverse impact on the business. The UK is one of the epicentres for technology and innovation and this can benefit the companies, where the UK would be now able to have its own strategic alliances and partnerships.
The UK has always been a strategic partner and Indian companies, both pharma and nonpharma firms have played a key role in those markets. Post-Brexit, the partnership will strengthen on various fronts and pharma would benefit too over a period of time. Though the finer details need to be worked out in the deals, Pronto Consult feels that the outcomes would positive and not detrimental. Regulatory approval is a key to trade agreements, which may get simpler and probably quicker too.
India can be an important strategic partner of the UK for accessibility of affordable medicines
India is a dependable partner providing safe, effective, and quality drugs to patients in the UK and fulfilling UK’s healthcare needs today and for years to come.
The UK is an important market for the Indian pharma industry as every fourth tablet sold in the UK is from India. Diversifying the supply chain is important for healthcare security and India and the UK can work together for consistent availability of medicines. India can be an important strategic partner of the UK for improved accessibility of affordable medicines. We are still examining the trade deal between the UK and EU as it is just out and yet to be ratified by these countries.
Post Brexit- India UK relationship
India enjoyed a 20 per cent tariff preference in the EU under its Generalised Scheme of Preferences (GSP) programme. EU’s GSP removes import duties from products coming into the EU market from vulnerable developing countries. It is to be seen how this gets impacted after Brexit, for exports to the UK. It would also be interesting to see how the competition unfolds in the EU, with countries with zero duty benefit in the EU (like Bangladesh, Pakistan, Philippines) also losing out with Britain’s exit.
Post-Brexit, complementarities between India and UK will rise exponentially
Post-Brexit, India and the UK may finalise trade agreements in areas like pharma, fintech, chemicals, defence manufacturing, petroleum and food products by 2021, as the two countries are keen on early harvest deals while continuing negotiati