Pharmaceutical industry fears MFN status to India harmful for local interestsstatus

Karachi: Pharmaceutical ManufactAssociation of Pakistan (PPMA) has expressed grave concern over the government’s seeming insistence on granting MFN status to India without taking into account the valid concerns of the domestic pharmaceutical industry.

The industry fears that in the absence of appropriate measures, the government’s move to grant most favoured nation (MFN) status to India will severely hit the local pharmaceutical industry, potentially inundate the market with spurious imported drugs, and render thousands of technical and non-technical and directly / indirectly related people jobless in the industry.

In such a situation, the pharmaceutical manufacturers would be forced to close down their units or move to other countries, which would be another loss of investment following the large-scale relocation of textiles to Bangladesh.

Political attempts to normalize trade relations with neighbouring India are being appreciated widely, but the people of each country expect their government to proceed with normalization in a way that protects and benefits its own national interests. The domestic pharmaceutical industry has been trying to get its views heard at policy echelons but to no avail as of now.

Reacting strongly to recent reports in the press suggesting that the Ministry of Commerce has informed the cabinet that PPMA has no issue with grant of MFN to India, PPMA officials have clarified that the industry strongly opposes the grant of MFN status to India unless its concerns are properly addressed and due priority is given to the Pakistani over Indian pharmaceutical industry.

Similarly, the industry in India benefits from several subsidies and incentives, including SEZ status, which gives industry preferential access to electricity and gas at tax-free rates. In contrast, the industry in Pakistan currently has almost no access to utilities, preferential or otherwise. India also employs several non-tariff barriers to imports into its market which must be countered first and a level playing field created before opening up our markets.

PPMA’s view has been endorsed by the Minister for National Regulations and Services (MNRS), Dr Firdous Ashiq Awan who expressed before the Cabinet meeting that the interest of pharmaceutical sector were not addressed by the Commerce Ministry.

Throughout the year 2012, PPMA had been expressing their concerns before various ministries. However, it is learnt that Ministry of National Regulations and Services is giving serious consideration to the observations of pharmaceutical sector. The Secretary MNRS has held a few meetings with the representatives of the pharmaceutical sector to find some reasonable and workable solution to issues likely to be faced by the pharma sector as a result of phasing-out of the negative list after the grant of MFN status to India.

The chairman PPMA has said that at the time of approving the summary of the MOC for granting MFN status to India in February 2012, the Cabinet, while considering the summary and approving the proposal, confirmed their commitment “to make appropriate changes in the trade defence laws in consultation with stakeholders to allay the apprehensions of the industrial sector for using these laws more effectively against any unfair practice or injury to the local industry by Indian imports”. However, not much has been done by the government in this regard and a number of investigations initiated by the National Tariff Commission of Pakistan (NTC) are still pending before the judicial courts. Pendency of such investigations for a long time nullifies any protective benefit that industry would hope to gain through such measures. PPMA has reiterated that in the absence of well-functioning quality barriers and safeguard measures, MFN status poses a threat both to the local industry and the healthcare system of Pakistan.

The respective ministries and other government of Pakistan agencies must address the concerns of domestic industry, including the pharmaceutical sector, before granting the MFN status to India. After all, it is the national interest that has to be kept supreme over all others.

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