2. Flow of Presentation
• What is “Make in India”?
• Reasons for the initiative
• MarketTrends and overview
• Statistics favoring making pharmaceuticals in India
• Growth drivers
• India advantage
• Policies adopted
• Cases to discuss
3. MAKE IN INDIA
• Make in India is aimed at making India a manufacturing hub and economic
transformation while eliminating the unnecessary laws and regulations, making
bureaucratic processes easier, make government more transparent, responsive and
accountable and to take manufacturing growth to 10% on a sustainable basis.
Objectives
•To make investing in manufacturing more attractive to domestic and foreign
investors
•To give the Indian economy global recognition
•To create competitive industrial environment
•To development infrastructure
•To invite latest technologies
•To generate employment and skill formation
4. Reasons for the initiative
STATUS OF MANUFACTURING SECTOR
• The situation of the manufacturing sector in India is a cause of concern.
• At 16% value added to GDP, the sector does not seem representative of
its potential which should have been 25%.
• In most rapidly developing economies, manufacturing sector contributes
25-40% to the GDP such asThailand’s manufacturing sector value added
to GDP is around 34%, China 32%, South Korea 31%, Indonesia 24% and
Germany 22%.
5.
6. BOTTLENECKS TO MANUFACTURING
SECTOR
• Inadequate infrastructural framework
• Lack of single window clearance facilities
• Inadequate availability of land for industrial
purposes
• Unbalanced growth in logistics sector
11. INCREASING INVESTMENTS INTHE SECTOR
• The Indian pharmaceuticals market
increased at a CAGR of 17.46 %in
2015 from US$ 6 billion in 2005 and
is expected to expand at a CAGR of
15.92 % to US$ 55 billion by 2020.
• By 2020, India is likely to be among
the top three pharmaceutical markets
by incremental growth and sixth
largest market globally in absolute
size.
• India’s cost of production is
significantly lower than that of the
US and almost half of that of Europe.
It gives a competitive edge to India
over others.
12. GENERIC DRUGS FORMTHE LARGEST SEGMENT
• With 70 per cent of market share (in terms
of revenues), generic drugs form the
largest segment of the Indian
pharmaceutical sector.
• India supply 20 per cent of global generic
medicines market exports in terms of
volume, making the country the
largest provider of generic medicines
globally and expected to expand even
further in coming years
• Over the Counter (OTC) medicines and
patented drugs constitute 21 per cent and 9
per cent
13.
14. Forecasted statistics
• The country’s pharmaceuticals industry is expected to account for
about 3.6% of the global pharma industry by value and currently
accounts for 10% by volume, by the end of 2016.
• The healthcare sector in India is expected to grow to USD 250
Billion by 2020 from USD 65 Billion currently.
• The generics market is expected to grow to USD 26.1 Billion by the
end of 2016
15.
16.
17.
18. COST EFFICIENCY AND COMPETENCY CONTINUETO
BE INDIA’S FORTE
Cost efficiency
• India’s cost of production is nearly 60 per
cent lower than that of the US and almost
half of that of Europe
• Labor costs are 50–55 per cent cheaper than
inWestern countries
• The cost of setting up a production plant in
India is 40 per cent lower than inWestern
countries
• Cost-efficiency continues to create
opportunities for Indian companies in
emerging markets and Africa
19.
20.
21. Competency
• India has a skilled workforce as well as high managerial and technical
competence in comparison to its peers in Asia
• India has the second largest number of USFDA-approved
manufacturing plants outside the US
• India has 2,633 FDA-approved drug products
• India has over 546 USFDA-approved company sites, the highest
number outside the US
23. 100% Foreign Direct Investment (FDI) is allowed under the automatic
route for greenfield projects
For brownfield project investments, up to 100% FDI is permitted under
the government route
The government may incorporate appropriate conditions for FDI in
brownfield cases, at the time of granting approvals
‘Non-compete’ clauses are not allowed except in special circumstances,
with the approval of the Foreign Investment Promotion Board.
The FDI is subject to applicable regulations and laws
FDI POLICY
24. EXPORT INCENTIVES
• Focus product scheme.
• Special focus product scheme.
• Focus market scheme.
• Export promotion capital
goods scheme.
AREA-BASED
INCENTIVES
• Incentives for units in
SEZ/NIMZ as specified in
respective acts.
• Setting up of projects in special
areas
• Industrial corridors
25. UNITS IN
CLUSTERS
• A scheme for the
development of common
facilities like effluent
treatment, testing
centres etc.
STATE INCENTIVES
• Besides the above, each state in India
offers additional incentives for industrial
projects.
• Incentives are in areas like subsidised
land cost, relaxation in stamp duty on
sale/lease of land, power tariff incentives,
concessional rate of interest on loans,
investment subsidies/tax incentives,
backward areas subsidies, special
incentive packages for mega projects
etc.
26. R&D BENEFITS
A weighted deduction of 200% is granted to assesses for any sum paid to a
national laboratory, university or institute of technology.
Weighted tax deduction of 150% under IncomeTax Act for both capital and
revenue expenditure incurred on scientific research and development.
A national center to help develop bulk drugs and facilitate their research is
being set up in Hyderabad.
Duty free import of Pharmaceuticals reference standards.
10% tax rebate on foreign revenue generated due to products patented and
developed in India
27. FINANCIAL SUPPORT
SETU (Self Employment andTalent Utilization) to be
established as a techno-financial, incubation and facilitation
program to support all aspects of a startup business. INR 10
Billion to be set aside as initial amount in NITI.
Atal Innovation Mission (AIM) to be established in NITI to provide
an Innovation Promotion Platform involving academicians, and
drawing upon national and international experiences to foster a
culture of innovation, research and development
The threshold limit of transfer pricing
regulations to specified domestic transactions
increased from INR 0.05 billion to INR 0.2 Billion.
28. FINANCIAL SUPPORT
ServiceTax exemption for common
effluent treatment plant operators.
Rate of income tax on royalty and
fees for technical services reduced
from 25% to 10% to facilitate
technology inflow
30. Make in India boost: Government to incentivise
companies to produce bulk drugs
• The government is working on a package to incentivise both state-run and private
companies to produce ingredients that are used in making medicines as part of a plan to
reduce dependence on China and boost the 'Make in India' program.
• As part of the package, the government is mulling revival of two sick public sector units
involved in production of active pharmaceutical ingredients (APIs) or bulk drugs, besides
inviting private companies to set up manufacturing units.
• There are five central government run units in pharmaceutical sector
• KarnatakaAntibiotics & Pharmaceuticals
• Rajasthan Drugs and Pharmaceuticals
• Hindustan Antibiotics
• Bengal Chemicals & Pharmaceuticals
• Indian Drugs and Pharmaceuticals (IDPL) of which only the first two have been making
profit.
31.
32. Make In India: Pharma entrepreneurs urge
industry to address compliance issues
• Some of India's top pharmaceutical entrepreneurs have urged the
industry to fix their compliance issues with regulators to create an
image of India as the producer of best quality medicines
• Also urged drug makers to innovate to leap to the next level of
growth in the sector.
• Out of the eleven warning letters issued so far by the Office of
Manufacturing Quality of the US Food and Drug Administration's
(US FDA) this year, six were issued to India-based drug companies
33. • While some of the units of major Indian drug companies such as
Wockhardt and Sun Pharma have been struggling for a few years now to
comply with the ever-increasing stringent current Good Manufacturing
Practices (cGMP) norms of the US drug regulator
• In November 2015 the market capitalization of India’s top five pharma
companies, Sun Pharmaceutical Industries Ltd, Dr Reddy’s Laboratories
Ltd, Cipla Ltd, Lupin Ltd and Wockhardt Ltd, have fallen by Rs.99,235
crore
• Much of the fall can be attributed to warnings and import alerts issued
by the US Food and Drug Administration (US FDA) on manufacturing
plants of the five companies.
34. • "I see India as the potential pharmacy hub of the
world
• We should focus on fixing the compliance.
• If manufacturing in India is accepted globally, it will
significantly improve the perception of quality of
Indian products
• Only this can be the cornerstone for the success of
MAKE IN INDIA- PHARMACEUTICALS"
35. INFERENCE
Economic growth of the industry
along with the availability of generic
goods and healthy competition is the
need of the hour for India.
After analyzing the impact of the
Make in India in the Indian
pharmaceutical industry, it is
established that India needs
adequate FDI and its spillovers for the
growth of the industry
