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EU alarmed over India's clout in global drug market

Jan 30, 2010 09:20 AM IST Business Business

New Delhi: India's growing clout in the global drug business is making the European Union see red. The EU is now blocking India's drug exports to African and Latin American countries.

Exclusive details available with CNN-IBN shows the European Union has been detaining and seizing Indian consignments that pass through the European ports citing patent violations. The Government of India is now crying foul.

"These exports are meant for African and Latin American countries. They are not meant for European countries. Europe is merely a passage. The destination countries have no problems with the seized consignments," says Drug Controller General of India, Ministry of Health, Surinder Singh.

The trend of blocking Indian exports has been going on for a year. Many manufacturers are not registering their complaint as they don't want to spoil their business prospects in EU.

CNN-IBN has documents of companies that have protested.

Cipla's consignment meant for Peru was seized in Netherlands on November 27, 2008. Half of it was released five months later.

A consignment of Dr Reddy's Laboratories meant for Brazil was seized in December 2008. It was sent back to India after holding discussions with the patent holder.

Another consignment of Ind-Swift which was to be delivered to Venezuela was seized in Netherlands. It was released only after Commerce Minister Kamal Nath intervened.

"There is a huge market for Indian medicines for HIV, cardio and life saving drugs in developing countries of Africa and South America. There is no reason for the passage countries to sight patenting issues," Pharmexcil Executive Director Dr Appaji says.
Experts say this will hit Indian pharma exports now pegged at around Rs 39,000 crore.

"There is reason to worry for Indian companies. Of course this could be one of the measures adopted by international rivals to choke their growth," claims pharma expert Vikas Dandekar.

The seizure of Indian goods in transit is against the WTO mandate and is in gross violation of multi-trade statutes.

The Indian government has taken this up with EU and World Trade Organisation without much success. Pharma companies are hoping that the government can find a permanent cure.