China exempting import tariffs on 28 drugs unlikely to boost India’s pharma exports

New Delhi: A move by the Chinese authorities to exempt import duties on 28 drugs, including all cancer drugs, is unlikely to benefit India and may be intended to pacify the US administration, according to the Indian pharmaceutical industry.

China’s ambassador to India, Lou Zhaohui, tweeted the news on 3 May, holding that it was good news for India’s pharma industry and medicine exports to China, and that he believed it would help reduce trade imbalance between China and India.

“#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!,” he further said on Twitter.

The move is not India specific and is applicable to all members of the World Trade Organization.

India’s trade minister Suresh Prabhu hailed the move by China. The minister posted on Twitter that it will boost drug exports from India and benefit the Indian pharma industry, which is known for exporting high quality drugs at affordable prices.

India and China had in March agreed to draw up a medium- and long-term road map with action points and timelines to address the $51 billion trade deficit between them, but no progress has been made on that front yet.

Although higher competitiveness in manufacturing is the main reason behind China’s huge trade deficit, Indian exporters often complain of Chinese non-tariff barriers.

At the Joint Economic Group meeting with his Chinese counterpart, Zhong Shan, in March, Prabhu said China had agreed to balance trade. “Both sides had agreed to take steps to promote trade in pharmaceuticals, including resolution of issues of Indian pharma exports to China. Our government is making all efforts to balance trade with China. We will keep working with Chinese government for other tariff and non-tariff issues being faced by Indian exporters,” he said on Twitter.

However, D.G. Shah, secretary general at Indian Pharmaceutical Alliance, said tariffs were not an issue as far as China is concerned. “With China, the major issue is non-tariff barriers. They take three-five years to approve a drug registration. Even after approval, commercialization of the drug takes a long time because of the non-tariff barriers,” he said.

As most of the cancer drugs are patented, this concession is meant for the US and will benefit US Big Pharma companies, said Shah.

Currently, a six-member US delegation is visiting China to resolve trade issues between the two countries that have brought both sides to the brink of a trade war.