Rupee pact with Iran to aid pharma exports:

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Rupee pact with Iran to aid pharma exports:

News: India and Iran has signed Rupee Payment Agreement which can boost pharma export to Iran

Important Features:

Rupee Payment Agreement:

  • Under the agreement Indian oil refiners deposits their import bill payment in designated account maintained by UCO bank
  • 50% of amount credited could be utilized by Iran to pay for imports of goods and services from India

India’s Pharma Sector Opportunities in Iran:

  • Iran meets its total 20% import from european countries which is under concern after US sanctions against Iran
  • Under US sanctions some countries including India got time bound exemption for importing oil which could be used by India to boost pharma export
  • India could be source of cost effective products for sanction hit Iran

Concerns:

  • India’s pharma export to Iran constitute mostly of APIs (Acute Pharmaceutical Ingredients -bulk drugs) which had decline from 2015-16=$180mn to 2016-17=$160mn

Way Forward:

  • Not all drugs imported by Iran are not innovator drugs and India should eye for Iran $1.3bn generic drugs
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