'Pharma exports drop by 8.5 pc to $2.5 bn'

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Saurabh Gupta | 18 Jul, 2017
Due to pricing pressure and stiff competition, the Pharma exports from India during April-May 2017 fell by 8.5 percent to USD 2.5 billion, said a report by Care Ratings.

"The prime reasons for the weak exports were price erosion in the generic market in USA due to consolidation among customers i.e. the distribution channels, increase in competition, absence of blockbuster drugs going off patent and regulatory issues faced by Indian Pharma companies," the report said, released Monday.

This situation continued even during the initial months of the current financial year 2017-18 and exports to USA declined by 23 percent y-o-y to USD 723.4 million during April-May 2017. The total exports from India during the same period fell by 8.5 percent to USD 2.5 billion," it added.

Of the total exports of USD 16.8 billion during the year 2016-17, majority of the exports, accounting for 40.6 percent were to the American continent followed by 19.7 percent to Europe, 19.1 percent to Africa and 18.8 percent within Asia.

Among the countries, United States of America is the primary export destination for India. Exports to USA have been on a rise since more than a decade. The exports are mainly driven by the cost advantage that India has.

The share of exports to USA in total drugs & pharma exports from India which was 25.4 percent in 2012 - 13 increased to 33.1 percent in 2016 - 17. For other countries like UK, South Africa, Nigeria, Russia, Brazil, Germany, Australia, the share of each of these countries in total drugs & pharma exports remained in the range of 1.4 percent - 3.3 percent in 2016-17.

In 2012 - 13, exports to USA grew by 14.2 percent y-o-y to USD 3.7 billion and increased in single digit in each of the following two years. In 2015-16, exports to USA surged by 27.8 percent to USD 5.5 billion on a y-o-y basis.

However, the export scenario to USA weakened and it grew by a marginal 1.3 percent to USD 5.6 billion in 2016 - 17, it added.