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With US trade under a cloud, China to give swift approvals to Indian drugs

NEW DELHI: China is preparing to give swift regulatory approvals to India-manufactured drugs, the head of an Indian export promotion group said, as Beijing looks for new commercial partners ahead of what could be a protracted trade war with the United States.

Indian firms are looking to fill gaps in Chinese demand for generic drugs, software, sugar and some varieties of rice, trade officials in New Delhi said. "We do feel that China is receptive at this time and it`s all about making prices competitive," said a government official involved in the effort to promote trade with China. The official declined to be identified since he is not authorised to speak to the media.

No concrete deals have been signed but the outlook for pharmaceutical sales from India is positive, according to officials from both nations.

India dominates the world`s generic drugs market, exporting $17.3 billion worth of drugs in the 2017/18 (April-March) year, including to the United States and the EU. But only one percent of that went to China, the world`s second-largest market for pharmaceuticals, industry data showed.

Dinesh Dua, chairman of the Pharmaceuticals Export Promotion Council (Pharmexcil), which falls under India`s trade ministry, told Reuters in an interview that Indian firms could expect to win licences to export to China within six months of application.

"We understand internally that Chinese authorities have issued instructions that EU-approved Indian suppliers should be granted the industrial drug licence in an expeditious manner so they can enter the Chinese market within six months," Dua said.

Many Indian drug-makers are already selling to the European Union. The EU is already one of India`s key export markets for medicines, and accounted for about 15 percent of overall drug exports in 2016/17, according to Pharmexcil.

Swift regulatory approvals in China, the world`s second-largest drug market, would allow Indian companies to boost revenue at a time when pricing scrutiny and regulatory troubles have hurt U.S. sales.

Some of India`s largest drugmakers, Sun Pharmaceutical Industries and Lupin Ltd as well as Aurobindo Pharma Ltd have been trying for years to expand in the massive Chinese market, which is second only to the United States.

Details of Chinese moves to open up its heavily regulated pharmaceuticals sector have not been previously reported.

The CFDA did not respond to a Reuters` request for comment. But Chinese Foreign Ministry spokesperson Hua Chunying said this week that China was moving forward on giving greater market access to Indian drug makers.

"China and India are witnessing a growth in pharmaceutical trade, and the two sides are in sound communication on opening the Chinese market to drugs from India and conducting dialogue and cooperation between the two sides` pharmaceutical industries," Hua told a regular news conference on Monday.

"The relevant departments have formulated specific measures on promoting China-India pharmaceutical trade cooperation and granting greater access to drugs from India. We believe that stronger pharmaceutical trade cooperation will contribute to the well being of the people in our two countries."

PENDING CLEARANCE

In May, China exempted import tariffs on 28 drugs, including all cancer drugs, a move that would help India reduce its trade imbalance with China, Luo Zhaohui, the Chinese ambassador to India said.
About 250 product applications from Indian drug firms are pending before the China Food and Drug Administration (CFDA), some of them for years, an Indian trade ministry official said.

Bilateral trade between the two Asian nations touched $89.6 billion in 2017/18 with the trade deficit widening to $62.9 billion in China`s favour, an over nine-fold increase over the last decade. The two sides are discussing ways to increase Indian sales of farm products, including sugar and some varieties of rice, to China.

India is also trying to persuade China to give access to its cost-competitive software service firms that have dominated global markets. Some of these firms are pitching for `smart` manufacturing projects in the central city of Wuhan and two other provinces in the healthcare and automotive sector.

But it is in the drugs sector that India is hoping to make the first dent, according to officials and a government document.

China has agreed to train Indian pharmaceutical executives to help them gain a swifter entry into the Chinese market, a government document seen by Reuters on efforts to improve trade with China showed. The training is planned for next month.

India`s Pharmexcil and the China Chamber of Commerce for Import and Export of Medicines and Health Products will shortly sign an agreement to ease clearance processes and help Indian companies find Chinese partners, according to the document.

Dua and the Indian trade ministry official said China will soon open a desk at its embassy in New Delhi to facilitate Indian drug makers.

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