Pharma exports from India are set to overtake domestic retail sales in the current fiscal. While exports in 2006-07 were Rs 24,600 crore and domestic retail sales were Rs 27,903 crore, exports are expected to forge ahead on the back of a projected 30% growth this fiscal.

According to the Indian Pharmaceutical Alliance (IPA), the gap between exports and domestic retail sales will only grow in the future. In fact, by 2012 the size of exports will almost double at Rs 112,275 crore growing at 35% against domestic retail market of Rs 58,607 crore with a stable growth of 16%.

Export growth is driven by growing dependence on generics across the world to contain health expenditure, acceptance of Indian generic drugs, aggressive expansion of Indian companies in international markets and entry of smaller companies into exports.

Export growth will be driven by the increasing number of patented drugs going off patent. Between now and 2012, drugs worth $100 billion will lose patent protection. Overseas takeover such as Merck buyout by Mylan will also accelerate sourcing of bulk drugs and formulations from India.

Today India has the highest number of USFDA approved manufacturing facility outside the US and this puts the country in a good position to export to regulated markets. Domestic companies aggressively pursuing international markets have also contributed to the growth of exports. But, competition is expected from companies in Eastern Europe and China which are also emerging as low cost producers of generics. Rapid erosion of prices of generics, non-tariff barriers and appreciation of rupee are also seen as hurdles to exports.

The total domestic pharma retail market in 2006-07 was Rs 27,903 crore growing at 14.2%, while institutional sales were Rs 7,417 crore, collectively taking the country domestic pharma market to Rs 35,320 crore.

Mr. Neeraj Sharma

Neeraj Electronics

CEO, Neeraj Electronics
Jorhat, India

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