The complete halt of all manufacturing industries except for essential services during the period of COVID-19 has hurt economies worldwide. India’s exports suffered a great deal due to the sudden stop of exports to other countries and thus affected the balance of payments and revenue of the country for the past two months.
In the initial months of the year 2020, India had been supplying medical goods such as
medicines and ventilators even though it suffers a huge shortage of these emergency supplies, to other countries such as China to extend support in these dire times.
However, as the number of cases began rising, there was an immediate stop to the export along with the imposition of the 21-day lockdown which has now been extended to 3rd May.
“Indian Pharmaceuticals in the International market”
China, the epicenter of the global outbreak, is the world’s largest supplier of active
pharmaceutical ingredients (APIs), also known as bulk drugs. India, which is a leading exporter of generic drugs in the international market, depends on China for more than two-thirds of its bulk drug needs.
Considering that India supplies almost 50 percent of generic drugs to the United States of America according to the Government of India, the sudden ban on exports hurt their medical sector.
India has always been one of the leading countries in supplies drugs and pharmaceutical
companies have helped contribute huge revenue to the budget of the country. According to the government of India’s own estimates, India ranks third worldwide for pharmaceutical production by volume and 13th by value. It accounts for about 10% of the world’s production by volume and 1.5% by value. This apparent discrepancy points towards the relatively lower cost of Indian pharmaceutical products, and therefore the high demand they enjoy within the global market. A major supplier of affordable low-price drugs across the planet , India’s role because the “pharmacy of the world” is well
acknowledged by experts. It has further consistently been a supplier of generic drugs to Africa to fight several diseases such as HIV and AIDS which is rampant in the country.
Trump had recently pushed for Hydroxychloroquine, an anti-malarial drug, as a miracle drug that has shown promising results to treat patients infected with COVID-19 in the absence of a vaccine.
India is one of the leading manufacturers of the drug hydroxychloroquine and after witnessing shortages in domestic supply due to huge orders from countries such as the US and Brazil had to ban the export of the drug. This led to US President Donald Trump to threaten India with “retaliation” if it did not supply the drug to the US, after which the govt of India lifted the ban and agreed to send supplies to other countries as well with the condition to put temporary bans to prevent drying up of stock for the medical sector of India.
“Bring relief to exports”
Cheap drugs and ample supply set the pharmaceutical industry as a beacon of hope for the stagnated Indian economy. The resuming of medical exports led to a boost in the production of pharmaceutical companies as the stocks began falling short. The contributions of this sector could provide some relief in the area of exports as India begins to send cargoes of large orders of the anti-malarial drug to several countries including Israel, Brazil and the US which garnered praise and gratitude internationally. As the interdependence between nations increases due to this pandemic calling for greater global cooperation, the Indian pharmaceutical markets may rise in the international market and emerge a savior of the stagnated economy and cushion the blow that the GDP will have to bear post the lockdown.