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KDPMA stresses on govt's assistance in ease of doing business for MSMEs to boost growth prospects
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Nandita Vijay, Bengaluru
September 24 , 2021
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For pharma MSMEs, the Union government's assistance in ease of doing business will be biggest game changer. This, along with sustainable exports with the government hand holding will create an ecosystem of efficiency to move up the value chain, said Harish K Jain, president, Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA).
Ease of doing business includes integrating multiple submissions for permissions into one format and a single electronic platform to streamline import and export process.
Further, MSMEs also seek assistance in research and product development as the sector cannot invest in and afford an R&D lab, he added.
Lowering of tariff protection has increased competition in domestic markets resulting in erosion of profitability. MSMSEs do not have the wherewithal to access financial instruments. For instance, there are some APIs (active pharmaceutical ingredients) which attract anti-dumping duty. So, when MSMEs purchase APIs from domestic traders for which an anti-dumping duty is already paid for and use it to manufacture formulations for exports where the anti-dumping duty is already built-in, it is a disadvantage compared to the bigger companies in India, Jain stated while addressing the Vanijaya Utsav event under the Azadi Ka Amrit Mahotsav organised by the ministry of commerce and industry services Export Promotion Council and the Karnataka government.
Reinforcing the fact that Indian pharma industry has a strong manufacturing base, Jain highlighted the cost of setting up a production plant is 40 percent lower than in the western countries.
“Such cost-effective manufacturing is because our labour costs are at 50-55% lower than the western countries and the overall cost of production is nearly 33% lower than in US. This is despite the availability of high quality skilled work force with managerial and technical competence with a strong knowledge of chemistry and pharmacy,” he pointed out.
Indian pharma is the largest provider of generic medicines globally which is expected to expand even further with many drugs going off-patent valued at US$ 250 billion between 2018-2024 offering a great opportunity. We are already seeing a high dependency on generics and off- patent drugs and the MSMEs could chip in their manufacturing prowess, he said.
MSMEs are working to improve process efficiency & supply chain, enhance quality & regulatory compliance which will enable the sector enters China, Japan, Argentina for exports.
There is also a need to establish a collaborative strong innovation ecosystem to capitalise opportunities in emerging growth areas like complex generics, biosimilars, vaccines, orphan drugs, speciality pharma, innovative dosage form to cater to the unmet needs.
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