‘Make in India’ version 1.0 Launch date: September 25, 2014
To make India a global hub in areas of
- Integral part of the global supply chain
Successful or Not: There are varied viewpoints over this debate. The measurement of outcomes in case of Make in India will still take some time. But meanwhile a good thing has happened – Launch of Make in India Version 2.0
Make in India Version 2.0: On the basis of Economic Survey, Govt. of India has launched the Version 2.0 of make in India in the year 2018. But this time Government seems to have changed the scattered approach and hence, Make in India version 2.0 is focusing on top 10 Revenue generation sectors. These so called 10 champions include Capital goods,Biotechnology, Chemicals, Defense, Pharma and Renewable energy and are expected to push growth in manufacturing and generate job opportunities. The others are Auto, Electronic system design and Manufacturing, Leather, Textiles, Food processing, Gems & jewelry, Construction, Shipping and Railways.
Bingo! This time focused approach. It may bring some good results on the table.
The good news is that Pharma Industry is now under the Make in India 2.0 purview & it is supposed to give a boost to the capacity building of Indian Pharma sector.
Latest Data & Information Available on Make in India Pharmaceutical Sector as on 31-July-2018
Pharma Sector Scenario:
- Indian pharmaceuticals market is expected to touch USD 55 billion by 2020 from USD 36.7 billion in 2016, growing at a compound annual growth rate (CAGR) of 15.92%.
- By 2020, India is likely to be among the top three pharmaceutical markets by incremental growth and sixth largest market globally in absolute size.
- There are over 10,500 manufacturing units and 3,000 pharma companies in India. Over 60,000 generic brands exist across 60 therapeutic categories.
- India accounts for 20% of global exports in generics, making it the largest provider of generic medicines globally. Indian vaccines are exported to 150 countries.
The Statistics look good:
- India’s total exports of Pharmaceuticals (APIs, Generics and Alternative system of medicine) during 2016-17 was USD 16.8 billion.
- India has a market share of almost 42% of Generic drugs produced globally, a market size of Africa and Middle East put together.
- North America is India’s largest export market, receiving over 34% of India’s pharmaceuticals exports. Africa is the second largest, receiving over 19% of India’s exports.
- The Indian pharmaceutical industry is largely dominated by generics drugs as the industry earns around 70% of its revenues from the same.
- India’s Pharmaceutical industry has filed the highest number of Drug Master Files (DMFS) with USFDA and by the end of year 2016, number of filings stands at 3,950. India’s Abbreviated New Drug Applications (ANDAS) totalling over 4,000 by June 2017.
FDI Policy for Make in India, Pharmaceutical Sector
- 100% FDI has been allowed through automatic route for Greenfield pharmaceuticals projects.
- For Brownfield pharmaceuticals projects, FDI has been allowed up to 74% through automatic route and beyond that through government approval.
Provisions of Healthcare & Pharma Budget 2018-19
- The allocation to the Ministry of Health and Family Welfare has increased by 11.5 per cent to USD 8 billion
- In a bid to make healthcare more accessible, new Health and Wellness centers are being established with USD 185 Million already allocated. These centers will provide essential drugs and diagnostics services free of cost. The centers are also designed to provide comprehensive health care, including treatment and medication for non-communicable diseases as well as maternal and child health services.
- The numbers behind the world’s largest government funded health care programme are staggering: It will provide hospitalization cover to over 100 million poor and vulnerable families. The scheme will provide coverage up to USD 7,700 per family per year for secondary and tertiary care hospitalization.
- The increased expenditure on healthcare is expected to benefit the pharmaceutical sector as well.
Financial Support for Research & Development in Pharma
Weighted tax deduction of 200% under section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure incurred on scientific research and development. Expenditure on land and buildings are not eligible for deduction.
What is “Expenditure on in house research and development -Section 35(2AB)”Where a COMPANY engaged in the business of bio-technology or in any business of manufacture or production of any article or thing, incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility as approved by the prescribed authority, then, there shall be allowed a deduction of a sum equal 200% of the expenditure so incurred1.
Focus for Investment Opportunity:
- Emerging segments such as Biosimilars and Specialty drugs
- Contract Research and Manufacturing Services (CRAMS)
Major International Investors in Indian Pharmaceutical Sector
- Teva Pharmaceuticals (Israel)
- Nipro Corporation (Japan)
- Procter & Gamble (USA)
- Pfizer (USA)
- Glaxo Smith Kline (UK)
- Johnson & Johnson (USA)
- Otsuka Pharmaceutical (Japan)
- AstraZeneca (Sweden-UK)
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