India, the world's largest maker of generic drugs, restricted on Tuesday the exports of certain common medicines and 25 active pharmaceutical ingredients, as it looked to prevent shortages amid concerns of the coronavirus outbreak turning into a pandemic.
Besides over-the-counter paracetamol, the restricted list includes common antibiotics such as metronidazole and Vitamin B1 and B12 ingredients.
A notification by the Directorate General of Foreign Trade said the export of 26 APIs and formulations would require licence. "Export of specified APIs and formulations made from these APIs is hereby restricted with immediate effect and till further orders," the DGFT said in the notification.
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Though India is a source of about 20 percent of the world's generic drugs supply, pharma companies in the country are dependent on China for two-thirds of the chemical components needed to make them. The coronavirus outbreak has shut factories in China and impacted supplies, leading to fears of a shortage of drugs and medicines.
On Feb. 18, industry body India Pharmaceutical Alliance said the sector has enough stock of APIs for 2-3 months only. Following this, on Feb. 20, ratings agency ICRA Ltd. revised its outlook for the India's pharma industry to negative from stable.
Pharma Imports & Exports
India's API imports stand at around $3.5 billion per year. Around 70 percent, worth $2.5 billion, come from China. India exported APIs worth about $225 million last year.
Restrictions on the exports are important as there would be an increase in demand for these products in the country. The restrictions can also be seen as a breather for an industry already grappling with declining sales for the past two months.
Apart from paracetamol, Vitamin B1, B6 and B12, other APIs and formulations over which the export restrictions have been imposed include tinidazole, metronidazole, acyclovir, progesterone, chloramphenicol, ornidazole, formulations made of chloramphenicol, clindamycin salts, neomycin, and paracetamol.
Market Reaction
The news boosted Indian pharma stocks. The NSE Nifty Pharma Index gained as much as 2.6 percent, making it the best sectoral performer for the day.
New Virus Cases
While three new cases of coronavirus were reported in India on Monday, "high viral load" was detected in six people who had been in contact with a coronavirus-infected patient. The deadly virus has so far killed more than 3,000 people globally.
The government issued a travel advisory suspending all regular visas/e-visas granted on or before March 3 to nationals of Italy, Iran, South Korea and Japan who have not yet entered India.
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