While a majority of domestic bulk drug manufacturers remain disappointed with a recent proposal to shift a sizeable part of their manufacturing capacity to Uzbekistan to boost production, a high-level business delegation from the Central Asian country of Uzbekistan has arrived in the capital to explore options for joint ventures in the pharmaceutical sector.
Pharmaceuticals Export Promotion Council of India (Pharmexil) will organise an interactive session between the visitors and the industry in Delhi on August 8 and has already received confirmation of attendance from 10 to 12 manufacturers, it is learnt.
“We have requested our members exporting to Uzbekistan and other CIS regions to participate in the meeting. Though it is true that most of the manufactures are not keen on shifting their units to the former Soviet Republic, their participation in joint ventures will hinge on the business proposition by the visiting delegation,” a senior Pharmexil official told Pharmabiz on condition of anonymity.
Regarding the proposal to shift units to Uzbekistan, the official said: “At the end of the day, it is the manufacturers’ call. We are only facilitating tie-ups by organising an interactive session.”
The Central government had recently invited the wrath of the industry by pushing an offer by Uzbekistan to provide a slew of incentives for setting up Indian bulk drug parks there. According to domestic manufacturers who are irked by the move, the government was adopting a counter-productive strategy when a few well-thought-out regulatory changes and tax incentives could boost the domestic manufacturing sector.
Indian Drug Manufacturers Association’s bulk drugs committee chairman Yogin Majmudar, who opposes any plan to shift bulk drug manufacturing base to other countries including Uzbekistan, says it will eventually backfire on the domestic industry. “What we need is a conducive regulatory environment here. The government should wake up and grasp the realities on the ground,” Majmudar opined.
Currently, India imports over 60 per cent of its bulk drug requirement from China and the government has been looking for ways to promote the domestic industry – comprising around 1,150 units producing 350 active pharmaceutical ingredients (APIs) – to reduce dependence on the neighbouring country. The Uzbek government has entered the scene at this juncture with an enticing investment proposal. In exchange for Indian technical expertise, the former Soviet republic is offering incentives including free land, 10-year tax holiday, faster environmental clearances and subsidised power and water.
“These are the initiatives we lack here. Uzbeks are offering quicker environmental clearances, tax breaks and subsidised power. These incentives were on the top of our demand list for a long time. If they clear these hurdles, we don’t need to shift our units to Uzbekistan to develop API industry,” Majmudar opined, adding that many Indian investors would soon be tempted to capitalise on the desirable investment climate offered by Uzbeks.
Despite producing a fifth of the world’s generic drugs, India imported APIs worth Rs.11,635 crore during the last fiscal. Bulk drugs worth Rs.13,853 crore were purchased from China in 2015-16 or 65.3 per cent of the Rs.21,217 crore total APIs consumed in the country. These included ingredients for essential antibiotics. The rest came from Europe, Japan and the US. – Pharmabiz