The pact between India and the United Arab Emirates (UAE) to boost bilateral merchandise trade is likely to expand the presence of Made-in-India medicines in Middle Eastern countries, chief of the central government’s pharma export arm has told News18.com.
Both countries have signed a Comprehensive Economic Partnership Agreement (CEPA) with the aim of increasing bilateral merchandise trade to $100 billion by 2030. Pharmaceuticals is one of the products that has been included in the vortex of CEPA.
The pact, which is claimed to be the first trade agreement India has made with a major trading partner in over a decade, eases out the conditions of drug approvals in the UAE.
The process of approval for any dossier filed by Indian drug makers in UAE – to sell their medicines in their market – took up to 24 months but now, it will be approved in 90 days.
The new clause applies to Indian companies who have facilities approved by eight drug regulators, including those of the US FDA, European Medical Agency, UK’s MHRA, TGA-Australia and Health Canada.
The reason behind India’s limited entry into the UAE market was its high consumption of patented drugs – innovative and expensive products – which are supplied by the developed countries, including the US and Europe.
While India leads the globe in manufacturing of generic medicines, UAE is bracketed among the top three high priced countries, the other two being the US and Germany. It spends $343 per capita (Rs 26,068 each person, on an average) on purchasing medicines.
In 2020, the data shows, the pharmaceutical market of the UAE was estimated at $3.5 billion (Rs 26,600 crore). It was further trifurcated into patented drugs, generic drugs and OTC market. However, the demand for patented drugs was highest, capturing around 68% of the total pharmaceutical market followed by 18% generic drugs and 14% OTC drugs.
How UAE Entry Can Sharpen India’s Access to Other Key Markets
The industry calls the UAE “a gateway” to several other countries, including the Gulf Cooperation Council (GCC) Iran, Iraq and Africa. The GCC consists of Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.
“While UAE is an unexplored and huge market for India, it’s more attractive because of the possibility of re-exports, hence a wider reach of Indian drugs in other markets,” R Uday Bhaskar, director general of Pharmaceutical Export Promotion Council (Pharmexcil), an arm under Ministry of Commerce and Industry told News18.com.
It means that the UAE first imports and then exports drugs to other countries. Hence, tapping into the UAE market will give access to multiple countries.
According to the data by Pharmexcil, the GCC countries import drugs worth $15 billion (Rs 1,14,000 crore), out of which $4.6 billion (Rs 34,900 crore) is generic drugs – the type in which India leads the globe. Presently, in the financial year 2020-21, India exported around $492 million (Rs 3,739 crore) which is just 2% of the available generic market.
“There is a huge scope of market penetration by India drug-makers,” Bhaskar said.
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