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Thursday March 28, 2024

Pharmaceutical trade with India resumes

By Khalid Mustafa
September 04, 2019

ISLAMABAD: With tension escalating between Pakistan and India with each passing day after New Delhi annexed the Indian Held Kashmir (IHK), the government has resumed trade with India but only in pharmaceutical sector apparently in a bid to avert the medicines crisis.

The commerce ministry issued an SRO-977 on September 2, 2019 allowing the pharmaceutical industry to import raw material, medicines and medical devices being regulated by DRAP (Drugs Regulatory Authority of Pakistan).

The new SRO, bearing number 977, has been uploaded on the commerce ministry’s website.

Earlier, the Commerce Ministry issued SRO-927 announcing trade embargo with India soon after New Delhi revoked seven decades of autonomy of the IHK.

In the SRO-927, the authorities extended the treatment to India it was giving to Israel. In the SRO-927, Pakistan placed India with Israel in the trade policy and vowed not to import anything from India, as nothing was being imported from Israel.

Pakistan had earlier bound itself to import anything from all countries except Israel because of the latter’s expansionist designs against Palestine.

Under the new scenario, the government placed India with Israel meaning that it will not import anything from India but in the new development the government has done a U-turn from its earlier stance adopted in SRO-927 and decided to import from India raw material, medicine and medical devices.

Under SRO-927, Pakistan had also declared India as the Most Un-favoured Nation in terms of trade. ‘However, for intra-Kashmir trade, there will be no bar on trade from the Pakistani side as Pakistan considers that Kashmir is a disputed territory and rejects the claim of India on held Kashmir.’

Top officials close to adviser to commerce, textile, industries and production and investment and secretary commerce confirmed the development saying the government had allowed Pakistan’s pharmaceutical industry to import raw material from India, as it could not afford unavailability of medicines in Pakistan which may trigger a medicines crisis.

‘This may also lead to agitational politics in Pakistan.’

Asked if India under the fascist regime of Modi did not honor the decision of Pakistan seeking trade in medicines, the officials had no answers except saying that in that case medicines crisis will adversely hit the country.

They said Pakistan’s pharmaceutical industry heavily depended on the Indian raw material as some generics were only available from India and more importantly its storage capacity was not for more than three month.

Earlier, when trade embargo was imposed against India, the commerce ministry had assured the industry that it will help in making inroads in China for import of required raw material and other medicines along with medical devices.

But since the industry can only import an item which is registered with the Drug Regulatory Authority of Pakistan (DRAP), it takes 6 months to get the item registered from new destination. So the industry is allowed to import the raw material from the same destination. It does not mean that Pakistan’s pharmaceutical industry would continue to import raw material from India for medicines all the time, as the commerce ministry is on its toes to help divert the trade business of pharmaceutical industries to China and other countries.

They defended the decision arguing in case of war or placing sanctions against any country, the food and pharma products were not included in the list of banned trade items.

A war is fought against the government or the regime and not the masses. So food and medicine imports are not included in list of banned items, as this is the part of international trade war or embargo norms.

Toeing the international norms, the government has allowed the industry to import raw material used for production of medicines in Pakistan.

The official quoted the examples of US which imposed sanctions against Iran from 2006 to 2016 and then the EU played role and diluted the US sanctions in 2017 in response to an agreement between Iran and Obama administration but after that the US again imposed strict sanctions against Iran.

However, the US had given waiver to eight countries to make trade business with Iran and in return the said countries continue to provide medicines and food to Iran so that the masses would not suffer.

The countries which were given a waiver from US sanctions for 6 months from November 2018 to May 2019 by Trump administration include China, India, Turkey, Japan, Greece, Italy and Taiwan.

After end to waiver to eight countries, the US allowed Switzerland to provide food and medicines to Iranians in exchange of trade under US waiver regime. The official further defended the decision of commerce ministry saying that in 1962 US imposed economic sanctions on Cuba but allowed to export medicines.

Similarly, they said the EU imposed sanctions on North Korea against the regime but it did not ban the export of food and medicines to that country.

India extended Most Favored Nation to Pakistan in 1996, but in return Pakistan did not reciprocate, but even then Indian exports to Pakistan touched $1.84 billion and Pakistan exports to India could not increase with pace rather these remained at $324 million just because of the huge NTB (non-tariff barriers).

Coming to the debate as to which nuclear power — India or Pakistan — in Saarc family will be the loser or winner after trade embargo, he said, according to 2018-19 trade Pak-India trade figures, imports from India remained at $1.503 billion, while Pakistan’s exports stood at $262 million and in 2017-18, imports from India were at $1.84 billion whereas exports from Pakistan stood at $324 million. ‘So if we keep in view the trade balance which is in favour of India, then after placing embargo on trade by Pakistan, the major loser is India, not Pakistan.’

After Pulwama incident, India imposed 200 percent tariff duty on Pakistani products which is why exports to India tumbled to $262 million in 2018-19 from $324 million in 2017-18.

‘However, the top management of the commerce ministry soon after imposition of 200 percent tariff duty, swung in to action and bailed out the dates and cement exporters by diverting their products to other countries.’

He said: ‘‘Our main exports to India include mainly dates and cement which were damaged on account of duty of 200 percent by India but the government has managed to export dates to other countries such as Nepal, Bhutan, Bangladesh, UAE and Oman. We have already booked the orders of other dates’ crop from the said countries.

Likewise, the cement exporters have managed to export the product to Central Africa, Middle East and Afghanistan and surprisingly the growth in cement export has increased by 30 percent. So with trade embargo, Pakistan is not the loser, rather it is the India.’’