Exports had registered near-muted growth in value terms during 2009-10.
The export revenue of the Indian pharmaceutical industry may touch Rs 50,000 crore for the first time ever, thanks to an estimated 20 per cent growth during 2010-11 over last year’s annual sales of Rs 42,092 crore.
The growth estimates turn significant as the medicine exports from India had registered near-muted growth in value terms during 2009-10, an indirect effect of the global economic slowdown that saw companies exhausting their inventories instead of making fresh orders the previous year, says Pharmaceutical Export Promotion Council (Pharmexcil) officials.
The expected growth is primarily linked to the fresh contracts from key export markets in North America and Europe.
“Pharmaceutical exports had grown only 4.13 per cent in 2009-10 as drug exporters were the last to be affected by the global economic slowdown. Things have changed and drugs worth Rs 15,161 crore were exported during the April-July period in 2010-11,” Pharmexcil Executive Director P V Appaji said. The revenues during the April-July period was 14.16 per cent higher than Rs 13,280 crore recorded during the same period a year before.
According to Appaji, the current growth percentage is about 20.
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Incidentally, US market had shown strong growth trends even when the overall growth dipped to 4.13 in 2009-10. The fall was primarily led by decline in revenues from the European Union, which is India’s second-biggest medicine export market after the US. Africa, Latin American countries and countries that were part of the former Soviet Union had also showed decline in growth during this period.
| Monthly Analysis of Drugs, Pharmaceuticals & Fine chemicals (Rs/cr) | |||
| Month | 2009-10 | 2010-11 | Growth rate (%) |
| April | 3208.84 | 3510.64 | 9.41 |
| May | 3008.81 | 3714.87 | 23.47 |
| June | 3458.02 | 3304.04 | -4.45 |
| July | 3604.29 | 4631.37 | 28.5 |
| Source: Pharmexcil | |||
The growth projections, however, are not based on a revival in the business fortunes in these regions. Industry analysts say the growth will be driven by the US revenues, where $36.7 billion worth drugs are expected to go off-patent in 2011.
“Even if there is a 90 per cent price erosion, Indian drug companies will be gaining market access worth $1.27 billion or Rs 16,500 crore in the US once these patent protection over these drugs expire this year,” said Ranjit Kapadia, vice-president (institutional sales), HDFC Securities.
According to Kapadia, Indian pharma exports will see about 25 per cent growth this year due to increased sales in the US. The growth will continue for the next two years as the revenue opportunities arising out of patent expires will spill over to the next financial year, he added.