Big opportunity for Indian pharma cos as China removes import duty on 28 drugs
In a move that will significantly help Indian pharmaceutical
companies expand their presence in the Chinese market, Beijing has removed
import duties on as many as 28 medicines, including all cancer drugs. The new regulations came
into force on May 1.
"China has exempted import tariffs for 28 drugs, including all cancer drugs, from May 1st. Good news for India's pharmaceutical industry and medicine export to China. I believe this will help reduce trade imbalance between China and India in the future," Chinese Ambassador to India Luo Zhaohui said on his official Twitter handle on May 3.
“China will further improve business environment by halving time required to open a business, State Council decided at an executive meeting chaired by Premier Li Keqiang on May 2nd. China’s door to the outside world will open wider. Indian businesses are welcome,” Zhaohui tweeted.
The development comes just days after Prime Minister Narendra Modi concluded his two-day China visit. The PM was on a two-day informal summit which was aimed at forging consensus to improve the bilateral relations between the two nations. New Delhi has time and again asked for greater market access for its goods and services, including pharmaceuticals, in the Chinese market to reduce the widening trade deficit.
A few weeks back, Beijing had also relaxed its regulatory guidelines for pharmaceutical sector to boost innovation and growth. The General Office of the State Council in Beijing released a new set of guidelines that states that it will accept data collected from clinical trials conducted outside the mainland for applications to register drugs and medical equipment.
India is a major player in clinical trials and a destination for many pharma majors from the US and Europe.
“The clinical use of new types of drugs will be supported. Local medical authorities are asked to include new medicines in the coverage of basic medical insurance and the scope of centralised procurement by public hospitals,” the regulatory notification stated.
The more than $100-billion China market is dominated by local drug manufacturers and multinationals and India’s pharmaceutical exports of around $160 million are a fraction of the companies’ sales. Official figures showed that India’s exports to China stood at $10.17 billion in 2016-17 while imports were at $61.28 billion.
It may be noted that India is largely dependent on China for active pharmaceutical ingredient (API) imports and the central government has been drawing up plans to reduce its dependence on the neighbouring country. Chinese companies used to sell APIs at lower prices due to availability of cheaper labour there. However, they have increased their prices recently due to rise in labour costs.
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