EsTrade discussions between the governments of India and China will include negotiations to improve access for 250 pharmaceuticals to China from India, Economic Times reports. That may require a deconstruction of tariff barriers put up by the government under the “Make in India” policy that has restricted Chinese medical devices exports, as outlined in Panjiva research of January 29.
The sense of urgency from Indian suppliers comes from a decline in the value of shipments to other markets, in particular the U.S. due to long-term price deflation. Panjiva data shows exports from India of pharmaceuticals and related chemical precursors have improved by 11.6% in the three months to January 31 on a year earlier. However, shipments to the U.S. (the largest market with 26.9% of exports in the past 12 months) declined 3.1%. China by contrast accounted for just 1.7% but expanded by 15.3% on a year earlier.
Source: Panjiva
Even in terms of growth though Indian suppliers including pharmaceutical maker Dr Reddy’s and intermediate producer Aarti have lagged China’s overall growth, with imports to China from all countries in 2017 having increased by 25.3% on a year earlier. That’s been led by a growth in exports from the Germany in particular which surged 26.5% to reach a new record in December.
Source: Panjiva
Yet, the Indian government will face an uphill struggle as the Chinese government will also likely want to promote its own export industry, where growth came to 11.6% in 2017 vs. 2016 and was led by a 17.9% surge in exports to the U.S. to reach a new record, led by Zhejiang Huahai Pharma.
Source: Panjiva
