Non-tariff barriers hit drug exports to China
Non-tariff barriers in the form of procedural, legal and cultural barriers are a major deterrent to Indian pharmaceutical exports to China, according to a Ficci survey.
By TNN |
NEW DELHI: Non-tariff barriers in the form of procedural, legal and cultural barriers are a major deterrent to Indian pharmaceutical exports to China, according to a Ficci survey.
Based on the feedback from pharma exporting companies, the survey highlighted the need for streamlining customs procedures and making effective use of technology for electronic data interface in customs administration and information exchange.
In the last three years, Indian pharmaceutical exports to US, Europe, Africa and South America have grown by 19% year-on-year while India���s exports to China have grown at 3%. In absolute numbers, Indian pharma exports to China have grown from $94 million in 2002-03 to $109 million in 2004-05. This accounts for barely 2%-3% of Indian exports of drugs and pharmaceuticals to the world.
According to the survey, the expensive and time consuming procedures for product and company registration and for procuring import drug licence are major trade barriers. Besides the official cost of $7,000 per product, they can cost anywhere between $20,000 to $40,000 per product. It may take 18 months to three years to procure an Import Drug Licence.
Tough banking procedures for foreign players, particularly for remittance of foreign exchange, are also identified by the survey as a non-tariff trade barrier. Long customs procedures, re-inspections and discriminatory packaging and labeling regulations that even specify the colour used for packaging, result in delays and higher costs and most of all consume energy and patience.
ADVERTISEMENT
The survey has recommended that these barriers should be identified and addressed and both India and China should work to remove them in a time bound framework. Easier trade financing and greater cooperation between the Exim banks of the two countries would also work to the benefit of trade between the two countries.Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
