Gujarat clocks double digit growth in pharma exports

At a time when India is likely to miss pharma export target, Gujarat has managed to up its share in overall pharma exports

While the overall pharma exports from the country is likely to miss target, exports from Gujarat has, however, managed to clock double digit growth last fiscal.

According to latest data from the Indian Drug Manufacturers' Association (IDMA), India has exported pharmaceutical products including bulk drugs and formulations of Rs 90,649.90 crore during 2013-14, which falls short of the government export target of $25 billion (around Rs 1.5 lakh crore). As per a Ministry of Commerce strategy paper, "As against a target of $25 billion for 2013-14, it is estimated that only $ 17 billion can be achieved - i.e. nearly 70 per cent of the target."

Gujarat contributes nearly 28 per cent to national pharmaceutical exports, said R S Joshi, executive secretary of the IDMA, Gujarat State Board. As per that, the state exported pharmaceutical products worth Rs 25,381 crore, which is higher than last fiscal's figure of around Rs 20,000 crore, when the state enjoyed a 25 per cent share of national exports. India's pharma exports were around Rs 79,184 crore during 2012-13.

There are two major reasons behind the state registering a double digit growth at a time when overall pharmaceutical exports have been on a slow lane as well raising its share in overall exports from the country. One being, small and medium pharma firms from the state have been focussing on exporting to semi-regulated markets. Secondly, industry insiders feel that with the tax benefits in hilly states coming to an end, many units from the state who had set up units in these tax havens, would gradually start focussing on expanding production within Gujarat.

Gujarat houses over 200 WHO-GMP certified manufacturing facilities, and SMEs from the state have clocked a 15-20 per cent growth in exports. Most SMEs from the state are exporting to countries like Philippines, Sri Lanka, Thailand in the South Asia block, apart from countries like Nigeria, Kenya, Ghana in the African continent. Of the net exports by SMEs from the state, the share of emerging markets is close to 60 %, which is growing at a 30-35 % rate every year.

A small firm called Saga Laboratories, which exports oral dosage forms to countries in Africa, Latin America and Commonwealth of Independent States (CIS), now exports almost its entire production, which has grown manifold in the last few years. When it started in 1994, exports hardly comprised 5-10 per cent of its net turnover; and the rest came from sales in the domestic market.

In terms of exports to regulated markets, Gujarat houses over 40 US Food and Drug Administration (USFDA) approved plants. "While exports from SMEs have increased significantly, it is the exports to regulated markets that drives revenue growth," said a senior IDMA official.