Pharma export to grow by 25%
Depreciating rupee to help Indian drug industry to achieve
exponential growth in overseas sales
Indian pharma industry is set to defy recession by registering a 25%
growth in exports during the current fiscal. As per projections made
by Centre for Monitoring Indian Economy (CMIE) pharma exports from
India is expected to touch the figure of Rs36,471 crore in 2008-09
against the exports of Rs29,140 crore in the previous year.
Depreciation in Indian rupee and cost advantage will help the
industry to post such an exponential growth in overseas sales. The
forecast seems quite optimistic, as the industry posted just 8%
growth in export in 2007-08 compared to Rs26,895 crore recorded in
2006-07. However, depreciation in Indian currency is going to help
them in a big way to achieve the growth. In the first half of the
current fiscal, rupee depreciated by whopping 6.6% against the
dollar and the trend is likely to continue till the end of the
fiscal. India's export of drugs and pharmaceuticals accounts for
almost 40% of the sectors' aggregate sales.
"Global recession is not expected to impact
Indian pharma sector due to its low cost manufacturing advantage.
Indian companies are mostly into the manufacturing of generic drugs
and offers drugs at a price much lower than the patent holder
company. In fact, slowdown will prove to be a boon forIndian pharma
companies, as foreign customers will look for cheaper products.
However, growth of exports may slowdown in last two quarters,"
says Sarabjeet Kaur, vice president, research-pharmaceuticals, Angel
Broking. "The first two quarters have been good for pharma sector
and no significant impact of slowdown was visible.
However, last two quarters may not be same and the sector may see
some slowdown in export," says Kamlesh Udani, executive director of
JB Chemicals and Pharmaceuticals Ltd.
The US is the largest market for Indian pharma companies and for
China, India is the largest market for exports. India exported drugs
and pharmaceuticals worth Rs1,872 crore to the US and Rs564 crore to
Germany in 2007-08. Import from China and Switzerland in the same
year was Rs1,320 crore and Rs288 crore respectively.
Bucking the trend
Pharma exports are expected to be around Rs36,471 crore this fiscal
against Rs29,140 crore in the previous year
Export accounts for almost 40% of the aggregate sales of the
Global recession is a boon for the sector, as foreign customers are
looking for cheaper drugs
Sachin Kumar/ DNA-Daily News & Analysis Source: 3D Syndication