HYDERABAD: Perhaps for the first time in decades, Indian pharmaceutical exports contracted last quarter, solely due to the Great Lockdown as countries shut borders to fight the Covid-19. During the January-March quarter of FY20, pharma exports contracted by 2.97 per cent; in March alone, it shrunk by a massive 23.24 per cent. The last quarter’s negative growth meant that the sector’s annual growth missed its FY20 target of $22 billion. For the full year, exports grew by 7.57 per cent at $20.58 billion. A year before, exports growth stood at a robust 10.72 per cent.
Data released by the Pharmaceutical Export Promotion Council of India (Pharmexcil) on Friday showed exports clocking 11.21 per cent growth during Q1FY20, followed by 8.69 and 14.64 per cent growth in Q2 and Q3 respectively. While January 2020 saw a decent 11.72 per cent rise in exports, much in line with the average of first nine months of 11.5 per cent, Covid-19 related supply chain disruptions dealt a blow in February and March that saw growth rates slip to 7.7 and -23.24 per cent respectively.
"Usually, Indian pharma exports during February and March are quite brisk. Having seen the good pace of export trends in the first three quarters and price stabilisation in the United States, it was estimated that in FY20, exports would reach $22 billion," said Udaya Bhaskar, director general, Pharmexcil.
Bhaskar added that India being dependent on China, which caters to about 60-70 per cent of our bulk drug requirements, has suffered disruption in the supply chain due to Covid-19. "Our imports of bulk drugs went down significantly in February. This, combined with lockdown measures across countries and export restrictions on some products, has contributed to the downturn in export growth," he added.
According to Pharmexcil, drug formulations and biologicals, which account for about 72 per cent of exports, registered 9.5 per cent growth in FY20, followed by vaccines and surgicals that saw 22 and 10.5 per cent growth respectively. In contrast, exports of bulk drugs and drug intermediates, the second largest category, contracted by 0.73 per cent.
To reduce import dependency on bulk drugs and other raw materials, Pharmexcil wants the Centre to develop three mega bulk drug parks in partnership with states and provide Rs 1,000 crore grants-in-aid to states for each park in next five years. It also sought financial incentives for eligible manufacturers of 53 critical bulk drugs (26 fermentation-based and 27 chemical synthesis-based bulk drugs) on their incremental sales over base year FY20 for six years.