While export of several industrial sectors is expected to shrink, Indian pharmaceutical industry is likely to see 16% rise in exports in 2009-10.
According to a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI), pharmaceutical exporters are expected to record 16% increase in 2009-10 whereas many industrial sectors are expecting negligible growth or shrinking of exports, as reported by Business Standard.
Out the 11 sectors analyzed, five are anticipated to see no rise in exports while three will post moderate growth of around 5%. In fact, 61% of people surveyed expressed concern that the overseas sales of Indian goods would either remain flat or contract this year. However, RNCOS forecasts that the Indian pharmaceutical exports will grow at a CAGR of 18.5% from 2007-08 to 2011-12.
The survey has also revealed that the pharmaceutical exports are likely to buck this trend, with an anticipated increase of 13% in overseas sales. Despite positive outlook for the current fiscal year, export growth is anticipated to be lower as compared to 23% in 2008-09.
Moreover, engineering goods, rubber manufactured goods, glass and ceramics and pharmaceutical are some of the sectors that are likely to post more than 10% growth in exports. The expected increase in pharmaceutical exports from India is based on weak presence of Chinese pharmaceutical companies in the global market.
Exporters also accredited depreciation in Indian Rupee against the US Dollar for surge in exports. According to the survey, 56% of respondents acknowledged moderate effect of declining value of Rupee against Dollar on exports, while 14% claimed that depreciation of Rupee had strong positive impact on exports.
Moreover, the Indian pharmaceutical companies have an edge over their western counterparts in drug manufacturing as they produce drugs at low cost and benefited from reverse engineering skills. Manufacturing bulk drugs and formulations in India is very cost effective, merely 10%-20% of the cost in the western countries.
According to a research report from RNCOS, “Booming Pharma Sector in India”, “Several drug manufacturers in India have upgraded their production centers that has made India one of the countries with the highest number of plants certified by EDQM, FDA and various other regulatory agencies. Moreover, this has empowered the Indian companies to venture into highly regulated but lucrative markets of Europe and North America.”
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