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Pharma exports back to growth in December, but may miss the target for the fiscal year

Gireesh Babu, New Delhi
Saturday, January 15, 2022, 08:00 Hrs  [IST]

Even as the pharmaceutical exports have turned back to growth in December 2021, from a consecutive decline in the previous three months, it may fall short in terms of annual target of $29 billion given that the first nine months of the fiscal year has only reported $18.18 billion exports.

The pharma export during the month of December has seen a growth of 5.2 per cent to $2.32 billion as compared to $2.2 billion in the same month of previous year.

Exports of drugs and pharmaceuticals have registered a decline in the three consecutive months from September, October and November, with exports declining 8.45 per cent, 0.88 per cent and 7.03 per cent respectively, compared to the corresponding months of the previous year.

For the first nine months of the fiscal year, the total exports of drugs and pharmaceuticals registered a marginal growth of 0.62 per cent to $18.18 billion as compared to $18.07 billion during April to December, 2021, according to the quick estimates of India’s foreign trade registered for the month of December, 2021.

The exports have been impacted in the previous months due to various factors including multifold increase in freight rates and a decline in reports to the US. While there were some changes in the exports to the US, it is yet to pick up to a growth level, said industry sources.

“Exports in December have registered a growth of around five per cent, as the buyers usually stock the medicines before festival season which falls in the second half of December,” said Ravi Uday Bhaskar, director general, Pharmaceuticals Export Promotion Council of India (Pharmexcil).

“Considering that there is one last quarter left in the fiscal year and the first nine months clocked in only around $18.2 billion, it may be difficult to reach the target of $29 billion during the financial year. We are expecting the growth to be similar to last year and achieve $26 billion in 2021-22, given the current trend,” he added.

The year 2020-21 saw an exceptional growth of 18.19 per cent in exports, to $24.4 billion, which is the kind of growth that happened after eight years.

However, during the current fiscal, there are several reasons impacting the exports, including the freight cost increase and a decline in exports to the US owing to the pending regulatory inspections in Indian sites by the US Food and Drug Administration, said industry experts.

Some of the warning letters issued by the US drug regulator also impacted the exports to the US market.

Some of the manufacturers in Japan and Europe also revived their pharma business during the Covid-19 period and started supplying to the US, which is another factor that may impact the Indian exporters, they said. 

Besides, the review of exports on a monthly basis may not give a clear picture of the growth in the sector, they said.

Meanwhile, import of medicinal and pharmaceutical products during the month of December has seen a growth of 19.32 per cent to $743.89 million as compared to $623.44 million during the same month of last year. For the nine months ended December, the imports grew 31.7 per cent to $6.9 billion as compared to $5.25 billion during the same period of last year.

Pharmaceutical exports have registered growth in the last few years, following a 2.92 per cent growth it registered for the year 2017-18, at $17.28 billion. The year 2018-19 has seen a growth of 10.72 per cent to $19.13 billion compared to the previous year, 2019-20 with a growth of 7.57 per cent to $20.58 billion, before hitting an eight year high or 18.19 per cent growth to $24.47 billion in the year 2020-21.


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