In a comprehensive overview of pressing issues facing India’s pharmaceutical exports, the Federation of Pharma Merchant Exporters (FPME) has identified critical areas requiring immediate attention to enhance ease of doing business and further solidify India’s reputation as the “Pharmacy of the World.”
Key challenges and recommendations identified by FPME for FY 2024-25 include customs issues post ADC clearance. Despite clearance by the Assistant Drugs Controller (ADC), customs officers at various ports demand documentation beyond their jurisdiction, such as Certificates of Analysis (COA) and WHO-GMP certificates. This issue, often exacerbated by new officer appointments, delays shipments unnecessarily. FPME urges Pharmexcil to liaise with the Central Board of Indirect Taxes and Customs (CBIC) to issue clear guidelines.
Besides this, labelling restrictions impact exports. The Central Drugs Standard Control Organization (CDSCO) internal memo restricting “Indian Markets Only” labelled products has negatively impacted small exporters. It has also harmed India’s global image as a leading pharma exporter, benefiting competitors like Bangladesh and Turkey. FPME has submitted detailed representations to address this concern.
Another festering issue and pending demand is of exemption from Section 43(B) for MSME payments. Section 43(B) of the Indian Income Tax Act mandates payments to MSMEs within 45 days, posing challenges for exporters due to fluctuating cash flows and currency issues. FPME plans to take this issue to the ministry of commerce, advocating for exemptions for exporters.
Exporters face inconsistent and exorbitant banking charges, which vary significantly across banks. FPME recommends the standardization of charges to support exporters and improve competitiveness.
FPME emphasizes promoting the Indian Pharmacopoeia (IP) standard globally to enhance the credibility and marketability of Indian pharma products. This aligns with India’s goal to strengthen its position as a global pharma leader. It has been observed that goods marked as Indian Pharmacopoeia are being stopped by the port authority under the pretext that these are meant for domestic sales only. These goods should be allowed to be exported as these are acceptable to the foreign customers.
FPME is also demanding relaxation of cough syrup testing norms. In response to mandatory cough syrup testing post-Gambia incident, FPME suggests a risk-based testing system to reduce burden on small exporters. Current norms make small-quantity exports commercially unviable, despite 99% compliance rates in testing.
It is also pushing for permanent solutions for track and trace compliance. The deferred implementation of Track and Trace systems due to practical challenges needs a long-term resolution. FPME advocates for stakeholder collaboration and global benchmarking to develop feasible solutions to combat counterfeit medicines.
The association is also asking to streamline import-export processes at airports. FPME proposes direct transfer facilities for imported goods destined for export to minimize costs and improve efficiency, boosting ease of doing business.
FPME officials further highlighted the industry’s contributions and potential, stating, “We are deeply concerned about these issues and their impact on our industry. With over USD 25 billion exports of which 30% stems from the merchant exporters, we have the capacity to double our growth annually, if these challenges are addressed. India can reinforce its global position as the Pharmacy to the World. The federation remains committed to addressing the challenges of its 300+ member base, ensuring sustainable growth for the industry.”
In its five years, FPME has achieved significant milestones. It has secured MSME status for trader exporters, advocated for single-port registration across India, eased export restrictions during Covid-19 and increased merchant exporter representation in the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
