India looks to China for exports

Pharmaceuticals, processed agro-products identified as focus areas.

With its exports to traditional markets like the US and Europe dropping sharply, India is planning to tap the growing Chinese market.

The commerce ministry has identified pharmaceuticals and processed agro-products as two focus areas for exports to China, according to a senior government official.

“We expect to make a significant dent in the Chinese market with strategic exports such as pharma products and agro items,” said the official.

Pharma exports, which are broadly classified under “drugs, pharmaceuticals and chemicals”, constitute the fifth largest item in India’s export list. But the Chinese imports of pharma products made in India were less than $100 million in the period between April and December, 2008, contributing less than 2 per cent to India’s pharma exports.

India’s exports plummeted by a record 33 per cent in March 2009, taking the overall export growth in the last fiscal to a dismal 3 per cent. The economic slump hitting the key markets of the West has led to a contraction in India’s overall export basket post-September 2008.

Trade volume between India and China has come down by 29 per cent in the January- March 2009 period on a year-on-year basis. For the fiscal 2009-10, the trade target between India and China is $60 billion, an increase of $10 billion over the previous year.

“There is a market for pharmaceutical products in China, particularly bulk drugs, which can be explored,” said Raghuveer Kini, additional executive director of the Pharmaceutical Export Promotion Council. China imports bulk drugs with the European Union, US, India and Japan as the biggest trading partners.

When asked whether China would impose stringent quality standards for imports from India, a senior commerce ministry official said, “Trade barriers like drug registration and dealing with stringent sanitary and phytosanitary measures have to be looked into.”

However, a pharma industry expert said, “Registration of drugs by the regulatory authorities is a routine safeguard measure that does not pose any barrier to our exports to China.”