Relax environment norms for export growth, say pharmaceutical firms

Pharmaceutical companies have asked for abolition of stringent environment norms and goods and service tax benefits to boost competitiveness and export.

According to the Pharmaceutical Export Promotion Council, domestic companies exported pharmaceuticals worth $ 17.2 billion in FY 18. Between April-July in FY 19 companies exported $5.9 billion worth medicines and exports grew 13.4 per cent.

Drug makers say relaxation in norms would enable them to reap the benefits of US-China trade war, tap new markets in Asia and Africa and respond effectively to certain product shortages.

Under the current norms, pollution control boards lay down permissible effluent limits while granting approval.

According to Indian Pharmaceutical Alliance secretary general D G Shah this policy has resulted in pollution control boards deciding product mix and quantum of production of active pharmaceutical ingredients."This is akin to a licence raj," he said.

The IPA has proposed that  units be allowed to manufacture any product in any quantity within their granted "effluent load." "The proposed change will allow units to optimize their product line and mix within the sanctioned load. Thus, a company can discontinue production of an item which is under threat or produce a new item without waiting for environment clearance," Shah said in a letter to the commerce ministry last week.

"Getting environment approvals takes time and limits production capabilities and ability to respond quickly to opportunities and emergencies," said Deepnath Roy Chowdhury, president of Indian Drug Manufacturers Association.

The IPA has also demanded exemption in GST on exports and offset benefits for equipment and machinery used in plants in export-oriented units.  "The current procedure requires manufacturers of goods to pay GST on exported goods and claim refund. This puts an undue burden on the exporter for raising additional working capital,"  Shah said.