Lanka woos indian pharma cos, to offer sops & space in se zs
Lanka Woos Indian Pharma Cos,
to Offer Sops & Space in SEZs
Make in India may be hit as there's already high dependence on China
for bulk drugs
Sri Lanka has invited Indian pharmaceutical companies to set up operations
in the country by offering them space in its special economic zones, a
prospect that has raised concern for domestic manufacturers.The Sri Lankan
government could also offer sops to Indian firms which invest to expand the
production of formulations and bulk drugs there.
Indian government officials said this will lead to expansion of the industry
footprint in Sri Lanka. “The Sri Lankan government wants to encourage
overseas investment by pharma companies because most countries now
want domestic production and reduce dependence on imports,“ said an
official privy to the details.
Though Sri Lanka had first floated this idea in 2012, the proposal did not
move forward then but could take shape this time as the Sri Lankan trade
minister is on a two day visit here. India exported pharmaceuticals worth
$205 million in 2015-16 to Sri Lanka.
“Sri Lanka can be a good base for exports also because they can
manufacture a part of the product here and part there. There are
similar opportunities for pharma in Bangladesh,“ said P V Appaji,
director general of Pharmexil.
Some trade experts said that this move could dent India's efforts of
promoting Make in India especially because the country itself has high
dependence on China for acti ve pharmaceutical ingredients (API) or
bulk drugs. “We should get our act together for strengthening domestic
API production before considering these kinds of project exports. The
situation on bulk drugs is grave because of dependence on China and
we should think of project exports to Sri Lanka only later,“ said Biswajit
Dhar, professor at JNU.
India imported APIs worth $3.9 billion in 2014-15, of which drugs
worth $3.3 billion came from China, and has begun the process of
establishing bulk drug manufacturing parks in the country to reduce
Another expert said that setting up manufacturing base in Sri Lanka will
hurt India's exports as some units might relocate there due to better
incentives. “This goes against Make in India as it promotes capital
flight. Even if we export from Sri Lanka, we will lose precious foreign
exchange,“ he said, requesting not to be identified.
The concern stems from the fact that India has lost substantial garment
making business to neighbouring countries.
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