India: Government begins anti-dumping probe into pharma imports

01/10/2020 12:00 - 171 Views

Indicating a spilling over of border tensions into the world of trade, India has begun a probe into the alleged dumping of a certain pharmaceutical raw material by Chinese companie. While the compound in question—Ceftriaxone Sodium Sterile—is just a drop in the vast ocean of Active Pharmaceutical Ingredients (API) imports, the probe comes at a time when domestic API companies are clamouring for the Centre to actively reduce India’s import dependency on Chinese APIs.

Brokerage note that China accounts for most of the key raw materials India’s massive pharma factories consume, with dependency on our northern neighbour for key starting materials (KSM) stands at around 60-70 per cent. The primary reason for this is the price factor. Pharma sector sources point out that China’s economies of scale result in 20-30 per cent cheaper prices than competitors from other regions, including India.

Monday’s circular from the Ministry of Commerce’s Directorate General of Trade Remedies (DGTR) indicates that government scrutiny is turning this way. DGTR said the probe has been initiated due to a report filed by Indian pharma firms Nectar Life Sciences and Sterile India. The firms allege that there has been “material injury” caused to the domestic industry due to dumped imports from China and have sought the imposition of an anti-dumping duty on the product.

Ceftriaxone Sodium Sterile is used in formulations for treating infections in the lower respiratory tract, skin, and intra-abdominal infections. “Having satisfied itself, on the basis of the prima facie evidence submitted by the domestic industry, about dumping of the subject goods originating in or exported from the subject country (China)...the authority, hereby, initiates an investigation,” the DGTR said.

If the authority confirms that dumping is taking place, it will recommend a certain anti-dumping duty to the government. ADD is an effort to ensure fair trading practices and creating a level-playing field for domestic producers.
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