22-Jul-2018 15:13:01


India and China have reached an agreement on the reduction of tariffs on the import of Indian medicines, particularly cancer drugs, to China. However, it is not yet clear whether China has agreed to grant licenses to Indian companies to sell cancer drug in the huge market here, which could be a major step. It is believed that expansion of exports and slashing of tariffs on anti-cancer medicines will also usher in great opportunities for India and other countries in the region.

The Chinese Foreign Ministry said on Monday that China and India had reached an agreement on reducing tariffs on Indian medicines, especially anti-cancer drugs. There is widespread demand in China for Indian anticancer drugs which are often one-tenth the cost of the Western drugs that are available in China.

The fact that a lot of people in China are diagnosed with cancer annually, has given rise to a demand for Indian drugs, mainly cancer-curing medicines, which have a big demand in China as they are far cheaper than their western counterparts.

Though a few Indian pharma companies operate in China, none have any approval from China's Food and Drug Administration to export the generic or cancer-related drugs, the Global Times reported.

The report said Indian firms complain of long procedures for trials in China spanning to years which have made them disinterested. The Indian drugs are, however, smuggled into the country due to heavy demand. India has been demanding the opening of China’s IT and pharmaceutical sectors as part of measures to reduce over billions of trade deficit. A lot of movies have been made in China depicting an urgent need of cheap medicines in China.

While announcing the agreement, a new Chinese film on the plight of a leukaemia patient was taken into consideration, highlighting the pressing need for China to pave the way for import of cheap Indian cancer drugs.

There is a popular movie now in China called ‘Dying to Survive’. That movie is about zero tariffs imposition on anti-cancer medicines in China. The film is based on the true story of Lu Yong, a leukaemia patient, who imports and sells less expensive generic anti-cancer drugs from India for chronic myeloid leukaemia (CML) patients on the Chinese mainland who can't afford the exorbitant cost of a drug produced by a Swiss pharmaceutical giant.

Chinese manufacturers are not allowed to produce generic versions of some western drugs as they have a patent protection period of between 30 and 50 years. All of these factors have forced Chinese patients to turn to illegal agencies to obtain cheap Indian drugs, and the quality and safety cannot be guaranteed as they are not inspected or authorized by the Chinese government. This requires China to import expensive western drugs, and most are not covered by the country's health insurance.

China has decided to expand their imports as well as opening up. This is what China needs in order to uphold the free trade and fight against protectionism. This is also important in keeping up with pace of development.

Both the sides have stepped up negotiation to import Indian rice, sugar and pharmaceuticals after a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping during the April 28 Wuhan informal summit.

China should increase Indian generic drug imports, strengthen cooperation with Indian pharmacies in developing generic drugs while increasing investment in developing new drugs. This would also help to manage the trade deficit in India by increasing its exports. Over the past few years it has been observed that as a result of an excess of imports from China over exports, India had experienced a trade deficit reducing its income. However, it is expected that this agreement between India and China would help better the situation.

Written by:

Diya Chawla