Under the agreement, Indian refiners make payments in rupee for oil imports from Iran, to designated accounts maintained with UCO Bank. A portion thus received is to be used by Iran to pay for imports from India, including pharmaceuticals, Indian newspaper The Hindu reported.
“Indian pharma exports to Iran were at $124.05 million last fiscal. Iran has a well-established pharma industry that meets 80% of the country’s requirement. The remaining 20% is met predominantly through imports from Europe,” said Ravi Uday Bhaskar, director general, pharmaceuticals export promotion council of India (Pharmexcil).
Pharmexcil, in a circular, intimated its members recently about the agreement under which 50% of the amount credited by Indian oil companies could be utilised by Iran for making payments to Indian exporters of goods and services. These funds may also be used for settlement of payments to Indian exporters for transactions that took place prior to operationalisation of the arrangement.
From $180.50 million in 2015-16, — bulk drugs and intermediates contributing to a little over $119 million and drug formulations and biologicals around $40 million — pharma exports to Iran fell to $160.33 million in 2016-17. Bulk drugs and intermediates accounted for $83.67 million, while export of drug formulations was for almost $47 million.
Mr. Bhaskar said Indian drug makers ought to eye a bigger pie in Iran’s $1.3 billion generic market.
