Australia FTA paves way for other pacts to loosen factory inspection norms: Pharmexcil’s Bhaskar

The interim free trade pact with Australia may not immediately enhance India’s pharmaceutical exports Down Under, but offers a major relaxation on factory inspections that can pave the way for more such deals with developed countries and fast-track Indian firms’ market entry, said the chief of India’s pharma export promotion council.

Australia is a $14.6 billion pharma market, with generics constituting 12% and OTC products 18%, and the bilateral Economic Cooperation and Trade Agreement (ECTA) that came into force in late December provides duty-free access for India’s pharmaceuticals. In 2020-21, Indian pharma firms’ exports to Australia were worth $387 million.

“Apart from market access, the most important breakthrough in the pact is fast-tracking of clearances for pharma products by utilising reports of comparable regulatory authorities from countries like U.S., U.K., Japan and Canada,” said R. Uday Bhaskar, director general of Pharmexcil.

“This will avoid duplication of factory inspections by utilising Good Manufacturing Practices (GMP) reports of comparable regulatory authorities and will prove very helpful for India’s free trade pact negotiations with other developed countries,” he said.

About 55% of India’s pharma exports go to highly regulated markets and it has the highest number of USFDA-approved facilities, so the pharma industry and government are requesting similar treatment from other countries during trade talks. That a developed country like Australia has conceded this request helps strengthen India’s case, Mr. Bhaskar pointed out at a discussion on the ECTA hosted by PwC.

While there may not be ‘any significant increase in exports to Australia in the near future’, expeditious clearance for Indian products will help infuse confidence in other countries too, he remarked.

“Australia is a key market in the Oceania region and this could influence others in the region like New Zealand, Fiji and Papua New Guinea to take a positive view of Indian products,” he explained.

“The difference in pricing between patented and generic drugs is not very significant in Australia, unlike in markets like the U.K. and the U.S., so generic drugs may grow slower. The Australian government is also thinking of reducing their healthcare expenses,” Mr. Bhaskar noted, adding that India could be an alternative supplier for the country’s Active Pharmaceutical Ingredients (API) needs.