Hopes of pharma sector shattered

Hopes of pharma sector shatteredIndustry in deep despair as many proposals remained on the paper

When 2016 began, the pharma industry in the State hoped to get an impetus in exports following promises to set up campus of Pharmaceuticals Export Promotion Council of India (Pharmexcil), National Institute of Pharmaceutical Education and Research (NIPER) and develop second pharma city.

Almost a year later the industry is in deep despair as the proposals have remained on the paper. Not a single major investment has come to the region during the year. Moreover, its demand for removal of Minimum Alternate Tax for units which came up in Special Economic Zone or reducing it from 20 to 7 per cent and doling out of sops for the new-born Andhra Pradesh has fallen on deaf ears. Pharma units are spread over Visakhapatnam, Srikakulam, and Vizianagaram in North Andhra making the region the main hub of State’s pharma industry. Jawaharlal Nehru Pharma City (JNPC), being operated in the PPP mode, at Parawada has itself has an estimated turnover of Rs. 15,000 crore.

Other major units like Hetero at Nakkapalli, Divi’s Lab at Bhimili, Aurobindo Pharma at Pydibhimavaram, Reddy’s Labs at Ranasthalam and Duvvada have an estimated turnover of Rs. 20,000 crore making the total volume of business at around Rs. 35,000 crore.

“We did hope to get a lot of benefits post bifurcation. Now at least the government should offer a slew of incentives for manufacturing units and R&D labs,” JNPC CEO P. Lal Krishna has told The Hindu.

Manufacturers say they are facing a dicey situation after Trump takes charge following fears that he will impose heavy tax to discourage imports by the United States.

Sops sought

To compete globally, the industry is seeking tax concessions and more incentives. “If we earn $100 from exports, $30-35 is going to China as most of the chemicals we need for use as raw material are being imported from there,” Dr. Lal Krishna has said insisting on encouragement to start production of chemicals that are required as raw material for pharma industry under ‘Make in India’ programme.

“The industry needs a booster dose like removal of MAT to make the units more competitive and earn more foreign exchange from exports,” Eisai Pharmaceuticals India Managing Director Sanjit Singh Lamba has said.

Establishment of NIPER will take care of specialised manpower required for the industry. Pharmexcil campus will not only help buyers-sellers’ shows but also enhanced the brand value of bulk drug and API producers from AP. JNPC is full with allotment of space by Ramky to investors.

The proposal for development of second pharma city between Nakkapali and Atchutapuram by Bulk Drug Manufacturers of India is still under consideration.

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