Chinese pharmaceutical producers see decreasing exports, rising costs

Updated 2017-10-09 10:34:54 Global Times

Political tension between India and China has hurt the drug exporting business of some Chinese companies, as domestic drug exporters told the Global Times that they have seen decreasing exports and rising costs in the Indian market.

A Guangdong pharmaceutical sales manager told the Global Times on Sunday that his company's exports to India have decreased and the company might turn to other markets if the situation worsens.

Another sales manager who declined to be identified and works in a Hangzhou-based pharmaceutical company told the Global Times that his company has seen rising costs in the Indian market since the border standoff.

According to a report of the Times of India on Sunday, the Indian government is developing measures to reduce the country's dependence on imports of pharmaceutical products, including active pharmaceutical ingredients (APIs), from China.

A drug sales manager who only gave his surname as Guo and who works at a pharmaceutical company based in Shenzhen, South China's Guangdong Province, told the Global Times on Sunday that the exports of his company's pharmaceutical products to India have decreased in recent months.

"Political tensions between China and India did have an impact [on exports]," Guo said, although he declined to reveal the specific decrease in export volumes to the Indian market.

Guo's company started expanding in the Indian market a decade ago, and it exports more than 1,000 kinds of products to the country, including pharmaceutical raw materials, medical products and agricultural chemicals.

"My company will try to shift its focus from the Indian market to other foreign markets if exports continue to decline after India decides to cut imports from China," Guo noted.

The sales manager of the aforementioned Hangzhou-based pharmaceuticals company told the Global Times that its export volume to India seems to have been unaffected by the political tension. "But each business that my company is involved in India had to be insured after July when bilateral political tension intensified, which to some extent, increased the cost," he said.

He said that his company primarily exports vitamin products to India, a business that started more than 10 years ago.

However, a sales manager at Natco Pharma, an India-based pharmaceutical manufacturer, told the Global Times on Sunday that Natco imports pharmaceutical raw materials from China, and those imports are going on as usual.

"No issue ... everything is normal," he said, but declined to elaborate on the imports when contacted by the Global Times.

According to the Times of India report, about 70 percent to 80 percent of India's medicines and medical devices supplies, such as APIs, are imported from China. Other overseas media, such as the BBC, have also noted that India in recent years has been very reliant upon drug imports from China.

Zhao Gancheng, director of the Center for Asia-Pacific Studies at the Shanghai Institute for International Studies, told the Global Times on Sunday that India mainly imports pharmaceutical raw materials from China, but they have the capacity to produce their own drug products.

He also noted that he has visited many Indian drug stores but never saw any made-in-China drugs in those stores.

Liu Xiaoxue, an associate research fellow at the National Institute of International Strategy under the Chinese Academy of Social Sciences, said that limiting imports of China's drug ingredients will hurt many pharmaceutical companies in India, as it would raise the costs of their medicines production.

"It's unlikely that Indian companies can find substitutes for pharmaceutical raw materials that are as cheap as those from China," Liu noted. "Otherwise, the Indian companies would not have become so reliant upon imports of Chinese drug ingredients," she told the Global Times on Sunday.

She said that India could develop its own pharmaceutical raw materials, but that would take time.

But Zhao noted that the Indian government's limits on Chinese drug imports are motivated more by economic concerns, as the country wants to reduce a large trade gap with China.

China exported .4 billion worth of products to India in the first eight months this year, while importing .6 billion products from India during the period, the customs data showed in September.

"India has taken measures such as launching anti-dumping investigations into Chinese products to cope with the imbalance, but the situation is not that easy to reverse. Made-in-India products don't have strong acceptance in the Chinese market, and the Chinese government has set a high threshold for some Indian products that do have an advantage, such as their medical products," he noted.

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