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Pharma exports to developed nations become easier as government scraps 'No Objection Certificate' rule

Economic Times:  January 25, 2016

New Delhi: The Modi government's ease-of-doing business drive is set to benefit India's drug manufacturers, especially companies such as Sun Pharmaceuticals, Wockhardt, Ranbaxy Laboratories, Dr Reddy's Laboratories and Cipla, which export their products to highly regulated developed countries.

The government has scrapped the requirement of obtaining a 'No Objection Certificate' from the health ministry for drugs exported to developed countries including the US, Canada, Japan and Australia and the European Union.

Clearance of consignments often takes long on account of delays by regulatory agencies in granting approvals. As per the relaxation, the waiver has been given to drugs, medical devices and cosmetics meant for export to developed countries with effect from January 1.

"These are highly regulated markets and they do sufficient scrutiny before importing from us. Since our exporters take due approvals from the importing countries, this additional document is not required anymore," said an official privy to the development.

About 55% of India's pharma exports valued at Rs 98,000 crore go to these regulated markets. The move is in line with the recommendations of a Directorate General of Foreign Trade report in 2014 on trading across borders to improve the ease of doing business in India, which asked all agencies to review whether NOCs and clearances issued by them are still required.

"If the clearance/NOC is still relevant and necessary, then to see whether the process of submission of application for grant of NOC and its processing and approval can be made online and integrated with the single-window system of CBEC, so that human interface and delay could be avoided/minimised," the report noted.

India's ranking on the 'trading across borders' criterion in the World Bank's Doing Business index has been unchanged at 133 (among 189 countries) for the past two years. This norm measures the time and cost associated with documentary compliance, border compliance and domestic transport while exporting or importing a shipment of goods.

Taking a cue from the DGFT report, the government last year reduced the number of documents required for exports and imports to three each.

"This is a move towards ease of doing business as it will reduce time gaps while taking approvals," the official said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.