New Delhi: The Government on Tuesday said it is considering forming a venture capital fund of Rs 2,000 crore to promote research and development (R&D) in the pharmaceutical sector.
"We are considering a proposal of venture capital fund of Rs 2,000 crore for drug industry. We are talking with Exim Bank for this," Commerce and Industry Minister Anand Sharma told reporters here.
Sharma was reviewing the pharma sector with industry representatives and government secretaries.
In the meeting, the pharma industry representatives raised issues like problems in getting approvals from the Health Ministry.
Sharma said all the concerns of the industry will be discussed by a committee of secretaries which will include commerce secretary, DIPP secretary and DCGI.
"We are mindful of the challenges of the sector with regards to financing of R&D, credit costs and duration," Sharma added.
India is the third largest producer of pharma products by volume and the industry is growing at a rate of 15-20 percent annually.
The domestic pharmaceutical industry is pegged at USD 20 billion and is expected to touch USD 75 billion by the end of this decade.
India's pharma exports stood at USD 13 billion last year. The country produces a fifth of the generic medicines of the world.
The country's overall exports declined by 4.16 percent in May.
In the meeting, Sharma said the industry has raised several issues, including promotion of 'Brand India' and biotechnology sector.
"Industry will give specific inputs on number of critical issues...Number of suggestions have come in the meeting. It will be considered for action by committee of secretaries," he said.
The committee would also discuss ways to enhance exports and other issues concerning the sector.
Speaking on the occasion, Wockhardt Founder Chairman & Group CEO Habil Khorakiwala said India's pharmaceutical industry is growing at a rate of over 20 per cent for the last several years.
"Huge potential exists in this sector for further growth. We have specific advantage over China. We have significant presence in the US and Europe....," Khorakiwala said. He asked the industry to properly utilise the funding of the government for R&D purposes.
Raising issues of the industry, Khorakiwala said the tax benefit of the sector got neutralized by minimum alternative tax.
In the first meeting of Consultative Group on pharmaceutical exports, Sharma assured the industry that the government will take up the non-tariff barriers being mounted by US as also EU against Indian pharma industry in bilateral forums at appropriate levels.
He said that a Committee of Secretaries will be set up to consider the suggestions to take Indian pharma industry on a growth trajectory in a time bound manner.
The progress will be reviewed after three months, he said.
Sharma asked the industry to explore business opportunities in emerging economies like Russia, Africa and South America.
"While time and again there have been attempts by multinationals to malign Indian generics as substandard, counterfeit, the resilience of Indian industry has withstood all these challenges," he said.
The industry made a strong plea for timely approvals and procedural simplification by Drug Controller General of India (DCGI) for clinical trials and import of samples.
They also requested liberal funding through venture capital vehicle for giving an impetus to R&D and innovation to this knowledge based industry.
"Industry was of the view that given the right impetus and policy initiatives, and procedural simplification, Indian pharma industry is capable of doubling the exports rather achieving a target of USD 50 billion in the next five years," an official statement said.
The meeting was attended by CEOs of Ranbaxy, Wockhardt, Panacea Biotech, Vimta Labs, Suven Life Sciences and GVK Bio Resources Ltd.
First Published: Tuesday, July 03, 2012, 16:11