Both China and the US are key markets for India from the pharma industry perspective
It’s been more than a year since China and the US are engaged in an escalating trade battle involving mutual placement of punitive tariffs. However, in the latest round, the US has excluded pharmaceuticals as a category from the list of trade war tariffs. This presents an opportunity for the Indian pharma industry, according to GlobalData, a data and analytics company.
Both China and the US are key markets for India from the pharma industry perspective. India has done exceptionally well in the US market, whereas it is still in the stage of exploring the Chinese market.
GlobalData forecasts the Indian pharma market to increase from nearly $30.8 billion in 2018 to more than $38.3
billion by 2022. Prashant Khadayate, Pharma Analyst, GlobalData, says, “This can be seen as a grace period where both China and the US could be looking out for alternatives. The Indian pharma industry can leverage this opportunity to become the partner of choice through strengthening its position in the US market and re-thinking on a long-term strategy for the China market. India is one of the major countries to import drug formulations to the US, whereas India’s position in overall pharma imports, which includes both drug formulations and bulk drugs, to China is negligible.”
According to the Pharmaceuticals Export Promotion Council of India, the US accounted for more than 30 per cent of total Indian pharma exports or $5.82 billion worth of value in 2018-19, which is the highest among all the countries. In addition, nearly 80 per cent of the bulk drugs requirement in the US is said to be met by India and China. On the other hand, the US has been the second biggest supplier to China with 15 per cent of the overall drug formulation imports, whereas India’s contribution was only 0.1 per cent.
Khadayate concludes, “The US is cautious of the fact that any disruption related to supply of bulk drugs from China due to a trade war could have a drastic impact on the overall US pharma industry supply chain. On the contrary, China is dependent on the US for the drug formulations import. The Indian pharma industry can take advantage of this situation as it has proven abilities in both drug formulations and the bulk drugs category.
“Therefore, it is pertinent to focus on the drug formulations category for China and help US pharma companies in fulfilling their bulk supply requirements from India. This category is currently dominated by China due to cost efficiency; therefore Indian players will need to improve their bulk drugs manufacturing capabilities in order to offer more competitive pricing and to gain a stronghold in the US.”
EP News Bureau