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Devaluation and the Pharmaceutical Industry
Devaluation, by making imports more expensive, has posed a new challenge to the pharmaceutical industry which is significantly dependent on imports of raw materials and intermediates. The recently-announced liberal import policy can help the industry to face the challenge if it is continued for some years.
But the main task is the industry's, in cost reduction and import substitution. However not much progress is possible in import substitution without developing a basic organic chemicals complex.
THE DEVALUATION of the rupee is a fait accompll. Manufacturers, traders and the public have to face the consequences of it, for the better or worse, and make the best of the situation.
The pharmaceutical industry in India has recorded a phenomenal growth since independence. The output in 1948 was valued at Rs 10 crores; this had grown ten fold to Rs 100 crores by 1962 and fifteenfold (Rs 150 crores) by 1965. The industry supplies almost all the country's requirements of finished medicines and in 196465 exported medicines worth more than Rs 2 crores. It has made remarkable progress in substituting indigenous for imported raw materials; the proportion of imported raw materials has been reduced from 21 per cent in 1954 to six per cent in 1965. The total annual production and import are given in table 1.
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