India likely to extend credit line to Sri Lanka for essential medicines

India is likely to extend a line of credit for essential medicines to Sri Lanka, in a bid to bail out its southern neighbour. A meeting was convened on Tuesday evening, which was attended by some pharma exporters, representatives from the Pharmaceutical Export Promotion Council (Pharmexcil), representatives from the Ministry of External Affairs (MEA), among others, to discuss the modalities.

The quantum of the line of credit to be extended is not yet known. At the moment, exporters are awaiting clearances from banks on currency-related issues, and consignments will be shipped soon, said a source in the know.

A senior government official confirmed the development and said Pharmexcil will be coordinating the export of essential medicines from India to Sri Lanka. “Sri Lanka is in need of essential drugs. They had reached out to India — the pharmacy of the world. We are trying to figure out how best this can be worked out… and a line of credit is likely to be extended,” the official said.

As such, India has already extended credit lines and currency swaps worth over $3 billion to Sri Lanka.
 

Sri Lanka, which imports almost 85 per cent of its drugs, had reached out to Indian industry bodies seeking help. A source in the Indian Drug Manufacturers’ Association (IDMA) said Sri Lanka had provided a list of 273 essential medicines comprising antibiotics, pain-killers, injectables, chronic medicines such as cardiac and diabetes, etc. “Some of our member companies have already started exporting drugs to Sri Lanka, but this is done more as aid. If they need more volumes, a line of credit from the Indian government is the best way to do so,” the industry official added.

Another IDMA official pointed out that a huge volume of drugs cannot be exported to Sri Lanka as there is no payment guarantee. “Exporters from India would thus need some government support, and today (Tuesday) there is a meeting of stakeholders,” the official added.

Already, states such as Tamil Nadu have come forward to help Sri Lanka. Tamil Nadu Health Minister Ma Subramanian and health secretary J Radhakrishnan inspected a warehouse in Chennai on Saturday where medicines to be sent to Sri Lanka are stored. The state government had urged the Centre a few weeks back to permit them to send essential commodities to Sri Lanka (rice, pulses, medicines, dairy products).