Exim Bank Role In Pharma Fund Sought

A section of the pharmaceutical industry has sounded out the Exim Bank of India on a proposal that involves making it the operating agency to disburse the research and development (R&D) fund announced by the government for the sector.

Industry sources said the Exim Bank had expressed interest in taking on this role. In a concept note on the issue the Bank has also stated that it could contribute to the R&D fund to the extent of 10 per cent of the government's contribution.

The Union finance minister recently announced a Rs 150 crore fund to encourage R&D in the pharmaceutical industry but the modalities for its disbursement are still being worked out. The note suggests that the allocation of Rs 165 crore could be leveraged by Exim Bank to provide as much as Rs 1,500 crore to the industry in the form of soft loans.

 

Exim Bank has proposed that the R&D fund be utilised to meet the interest differential between the rate of interest payable by the company and the normal

commercial rate of interest that a lending institution would have charged.