Indian pharmaceutical industry’s exports grew at their slowest pace in 15 years which stood at around 1.2 percent to $14.84 billion in the FY14 mainly on account of rising tension with the US over Intellectual Property Rights (IPR) related issues. The previous slowest growth rate for domestic pharma exports was in FY10 at 5.9 percent.
The US accounts for about 25 percent of India's pharma exports. Presently, US pharma industry is contending that India's IPR laws particularly with regard to pharma sector discriminate American firms and put pressure on the US government to take actions against India. Furthermore, Obama administration has also been strongly criticising India's investment climate and IPR laws, particularly in the pharmaceutical sector. In addition, Vietnam too has raised concerns over quality defects in drugs imported from various countries, including India which is a major supplier to the country.
Furthermore, the prevailing political turmoil between Ukraine and Russia which has led to political and economic tensions in the Crimean region also hit the businesses of leading Indian pharmaceutical companies as the sector is the top exporters to the CIS region countries. The government has set pharma exports target for current fiscal at $25 billion, which seems difficult amid concerns like IPR issues raised by the US and prevailing tension between Ukraine and Russia.