Exim Bank to offer long-term finance to pharma companies
Mumbai: In a bid to boost export capability of Indian pharmaceutical companies, Export-Import Bank of India (Exim Bank) has decided to expand the scope of its finance to them for extended repayment periods.
Eligible export-oriented companies can avail finance from Exim Bank for a maximum repayment period of 10 years with a moratorium of upto 36 months, a statement issued here said.
Cost of compliance with USFDA norms is high as an USFDA approved API manufacturing facility can cost up to Rs 30 crore to Rs 40 crore and formulations manufacturing plant may cost about Rs 50 crore to Rs 60 crore while average gestation period for setting up these plants is about 18-24 months, the release said.
Despite having potential to increase their share in global exports, many Indian pharmaceutical companies suffer due to their inability to meet the stringent compliance norms of European countries and the USA.
According to Exim Bank, the size of the Indian pharma industry was around USD 29 billion in 2011-12, but in value terms, it constituted only 1.2 per cent of the global pharmaceutical market. To increase market share, the industry needs to penetrate deeper in the regulated markets which calls for accreditation of more facilities of Indian manufacturers.
To meet the expectations of the Indian industry and to cope with longer average gestation period to meet USFDA or other similar regulatory requirements, Exim Bank has decided to provide term finance to pharmaceutical companies, with maximum repayment period of 10 years, Exim Bank said.