PharmaBiz.com | 6 January 2018
As India set to sign FTA with Peru, govt seeks industry views on export import duty rates
by A Raju
As India is planning to sign a Free Trade Agreement (FTA) with government of Peru to facilitate free trade between the two countries, the Department of Commerce has sought the opinion of Industry leaders to gauge the impact of import-export duty on pharma exports to Peru.
As per current trade equations between India and Peru, Peru does not impose any duty on our Bulk drug exports under chapter 29, while India impose 7.5 per cent import duty on their exports to India. Peru imposes 6 per cent duty on imports from India on some of the finished dosage formulations and imposes no duty on the rest, while India imposes 10 per cent.
If FTA is signed between India and Peru both countries will be able to do trade without imposing duty and through negotiations the present 6 per cent duty on imports from India can be reduced to Zero percent on finished dosage exports.
This would be of great benefit to both the countries. However, if the trade equation between the two countries is in imbalance it would be causing more harm than benefit to India. In view of this, the government is seeking the Industry leaders’ opinion before entering into the FTA agreement with Peru.
In view of this, the Pharmaceuticals Export Promotion Council of India (Pharmexcil) has sought the opinion of Industry leaders in order to assess the pros and cons of free trade agreement with the South American Country on Indian exports. “We understand that the government of India is planning to sign a FTA with Peru. During the negotiations, Peru might request India to lower the import duty and offer the same benefit as we are enjoying. Current global scenario regarding Trade pacts are fast changing. Peru simultaneously is entering into agreement with various countries and Group of countries including China, Colombia, and Mexico etc. some of which are strong manufacturers of KSMs and/or drug intermediates. India has no imports from Peru at present. However, any negotiation with Peru might indirectly benefit any of those countries with which Peru has an FTA as they can export through Peru availing those benefits. Government has requested us to collate the industry’s opinion about the likely impact of such a situation on our domestic industry,” informed Udaya Bhaskar, Director General of Pharmexcil.
As per statistics provided by Pharmexcil, the overall pharmaceutical export to Peru has shown a negative growth of 19 per cent during the year 2014-15 and 2016-17. Though the exports increased from $49.47 million in 2014-15 to $62.83 million in 2015-16, it fell to $50.89 million in the subsequent year 2016-17.
In view of this, government is planning to negotiate a free trade agreement with Peru government and seeking the opinion of pharma industry experts before 10th of January 2018.