Zero customs duty on US medicine imports
Context:
Recently, the Indian Pharmaceutical Alliance (IPA) announced zero customs duty on US medicine imports.
- This move was to maintain India’s dominance in the American pharmaceutical market and to avoid the reciprocal tariffs of the US.
Relevance:
GS- 2 (Government Policies & Interventions)
Significance of IPA’s Zero Import Duty:
- India’s one-third of pharma exports is to the U.S. and a zero-duty policy helps India to tackle reciprocal US tariffs and safeguard India’s exports.
- Adopting zero-duty policy and reducing import duties on life-saving medicines, helps India to build strong trade ties and counter possible US reciprocal tariffs.
About India’s Pharmaceutical Industry:
- India currently ranks 3rd globally in terms of pharmaceutical production by volume.
- India is the 14th largest country in terms of value.
- It supplies more than 50% of vaccine demands worldwide and 40% of generic medicines in US alone.
- For the FY 2023-24, the pharmaceutical market of India is valued at USD 50 billion, contributing around 1.72% to the GDP.
- It is also projected to reach USD 130 billion by 2030.
- India’s biotechnology sector, valued at USD 137 billion in 2022, aims for USD 300 billion by 2030.
- India supplies about 20% of the world’s generic medicines, maintaining a strong foothold in global markets and produces over 500 Active Pharmaceutical Ingredients (APIs), contributing 8% to the global API supply.
Key growth factors:
- Competitive Pricing: Indian pharmaceuticals are more affordable than Western alternatives, giving them a global edge.
- Policy Push: Initiatives like the Production-Linked Incentive (PLI) scheme and Bulk Drug Parks encourage local production and exports.
- Innovation and Research: A strong scientific base has driven 64,480 patent filings in 2023, placing India at 6th globally in patents.
- Expanding Global Demand: Growing cases of chronic diseases and ageing populations worldwide increase the need for affordable drugs.
- Export Performance: India exports to over 200 countries, with USD 27.82 billion in exports in FY24, ranking 12th globally in medical goods.
- Government Backing: Strategic plans like the PLI scheme, National Medical Device Policy 2023, and Bulk Drug Parks support industry growth.
About Reciprocal tariff:
- Reciprocal tariffs are trade policies where two or more countries impose similar or matching tariff rates on each other’s goods. These tariffs are often used as a response to another country’s tariff policies to ensure fair trade.
Prelims Question:
Which of the following correctly describes India’s position in the global pharmaceutical market?
- India is the largest supplier of generic medicines, contributing around 20% of global demand.
- India ranks among the top three countries in patent filings worldwide.
- India’s medical device market is expected to grow from USD 11 billion to USD 50 billion by 2030.
Options:
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2, and 3
Answer: c) 1 and 3 only
Statement 1 is correct: India supplies about 20% of the global demand for generic medicines.
Statement 2 is incorrect—India ranks 6th globally in patent filings.
Statement 3 is correct: The Indian medical device market is projected to grow from USD 11 billion to USD 50 billion by 2030
