Pharma cos fear loss in edge due to rising rupee

Pharma cos fear loss in edge due to rising rupee


New Delhi: Fearing a loss in export revenues due to the appreciating rupee, pharmaceutical exporters have asked the government to extend relief measures to the sector similar to those being extended to nine select industries.

In a letter to Commerce and Industry Minister Kamal Nath, Pharmaceutical Export Promotion Council (Pharmexcil), has sought relief measures such as higher DEPB (Duty Entitlement Passbook Scheme) rates and 6% concessional rate on post- and pre-shipment credits to all exporters.

“We are very happy that the minister has given relief package to nine industries but the pharmaceutical industry was inadvertently left out," Pharmexcil said in its letter to the Commerce Minister.

The industry body fears that the competitiveness of the pharmaceutical sector would go down in the export market if the trend continues and reliefs were not extended.

“The pharmaceutical sector contributes nearly 5% to India’s overall export and should be included in the select industries which have been given sops to counter the effect of rising rupee," Pharmexcil chairman D B Mody told PTI.

He said the sector would incur huge losses if sops were not extended to it.

“The rupee strengthened 63 paise yesterday (20 September) and would have drastic effects on pharma exports. We want the government to announce uniform relief measures for all exporters," Mody said.

Pharmexcil has sought a concessional rate of interest on credit for pre- and post-shipment credits, differential currency rates and extension of income-tax exemption up to 2009.

Last month, in a letter to the Director General of Foreign Trade, Pharmexcil had sought inclusion of Russian Federation and Ukraine under the Focus Market Scheme to partly nullify the impact of the rupee rise.

The council fears that small and medium export-oriented pharmaceutical firms would be most severely affected and might take a hit of nearly 5-10 per cent on their bottom lines.