Relax green norms for export growth, say drug makers
Pharmaceutical companies have asked for abolition of stringent environment norms and goods and service tax benefits to boost competitiveness and export. According to Pharmaceutical Export Promotion Council, domestic companies exported pharmaceutical worth $17.2 billion in FY18. Between April and July in FY19, companies exported $5.9 billion worth of medicines and exports grew 13.4 per cent.
Drug firms say relaxation in norms would enable them to reap benefit of US-China trade war, tap new markets in Asia and Africa and respond effectively to certain product shortages. Under the present norms, pollution control boards lay down permissible effluent limits while granting approvals.
According to Indian Pharmaceutical Alliance (IPA)
Secretary General D G Shah, this policy has resulted in pollution control boards deciding product mix and quantum of production of active pharmaceutical ingredients. “This is akin to a licence raj,” he said.
The IPA has proposed that units be allowed to manufacture any product in any quantity within their granted “effluent load”. “The proposed change will allow units to optimise their product line and mix within the sanctioned load. Thus, a company can discontinue production of an item which is under threat or produce a new item without waiting for environment clearance,” Shah said in a letter to the commerce ministry last week.
“Getting environment nods take time and limits production capabilities and ability to respond quickly to opportunities and emergencies,” said Deepnath Roy Chowdhury, president of Indian Drug Manufacturers’ Association. The IPA has also demanded exemption in GST on exports and offset benefits for equipment and machinery used in plants in export oriented units.
“The current procedure requires manufacturers of goods to pay GST on exported goods and claim refund. This puts undue burden on the exporter for raising additional working capital,” Shah said.
In March, 2018 report on pharma sector performance during the year 2017-18, Equitymaster said the industry continued to face bigger challenges on the regulatory front.