Beijing: With China set to open up $50 billion pharmaceutical market, India has made a strong pitch, saying the burgeoning Indian pharma sector could step in for supplying affordable life saving medicines to its neighbour.
“China is one of the world’s fastest growing drug market with an expected value $50 billion.
“India’s advantage in the Pharmaceutical sector could make it the ideal choice for China’s sourcing of affordable, cost-effective and life saving drugs,” said K Nagaraj Naidu, counselor, Trade and Commerce of the Indian Embassy here.
Naidu was speaking on Tuesday at the second India-China Pharma Trade Conference in Shanghai, attended by top officials of over 100 Indian and Chinese companies.
The opening of the sector has provided an unprecedented opportunity to the Indian companies as the Chinese government has set an ambitious target of bringing virtually all the population within the healthcare insurance framework by 2020.
Chinese multi-tiered healthcare system is poised for major opening up and accelerated development of a multi-level insurance system has become a government priority.
“This will further boost demand for low-priced drugs, particularly generics,” Naidu said.
For Chinese companies looking to manufacture in India, FDI in manufacture of drugs and pharmaceuticals is freely permitted up to 100% under the automatic route.
India already offers tax concessions to pharmaceutical sector, including tax holidays for industrial operations established in free trade zones, deduction of profits earned from exports, liberal depreciation allowances, deduction of capital R&D expenditure and relief on all contributions to approved domestic research institutions.
Making a strong appeal to Chinese government, Naidu said an opening up of the pharma sector in China would also help reduce the trade imbalance.
India has a strong footing in the field; its overall pharmaceutical exports, which touched $12 billion in 2010, are projected to rise to $20 billion by 2015.
With $70 billion worth of drugs expected to go off patent in the US in the coming years, India is well positioned to play an important role in the resulting new generics markets, he said.
According to Indian officials here, while lack of information in China is cited as a concern by Indian firms, many of them are setting up offices here with expectations that the coming years will see more of Indian Pharma exports to China.