India’s pharmaceutical industry has indeed emerged as a force to reckon with. A recent KPMG report states that the country’s pharma exports add up to $13.7 billion (while imports stand at $1.99 billion) and it meets 50% of the global demand for generic drugs. The problem is we import an estimated 70% of active pharmaceutical ingredients (APIs) from China. Understandably, the Covid-19 crisis and the consequent lockdown served a gut-punch to the industry. There have been freight shutdowns, non-availability of labour, and a spike in cost of a few imported raw materials. However, there is a silver lining, especially for this industry. Kiran Mazumdar Shaw, CMD, Biocon, certainly thinks that the pandemic could be a blessing in disguise.
How do you think the world is going to emerge post this pandemic?
It all depends on how long the world will take to recover from Covid-19. Organisations such as the IMF have already declared a global recession. In India, we could lose 30-40 million jobs by the end of the year if we are unable to bring the economy back on track. The world economy, which was estimated at $90 trillion, was already under a $260 trillion debt burden, and it will get worse. Many believe it will take at least another year to see anything close to normalcy. China is trying to get back to business as fast as possible, and the country that contributed 16% of global GDP will surely consolidate its position further. Although the US had 24% of global GDP, it is going to be hit badly. I think we need to look at the geopolitical dynamics and see how the world is going to shape up after Covid-19. It is not going to be a consumption-driven economy because demand will take a hit.
How has the outlook for Indian pharma changed?
Focusing inwards is going to be on every country’s agenda and India needs to figure out a way to become globally competitive. That’s where I believe that India’s biomedical industry has a lot of potential because not every country can be self-reliant and export biomedical products. We have a mature pharmaceutical industry due to our generics and are also developing strengths in biopharmaceuticals with companies such as ours.
India had ceded ground to China in terms of antibiotics and APIs, which should be ramped up with the capacity that we have. We have