Hit hard by the continuing row over intellectual property rights related to generic equivalents of some patented medicines and regulatory concerns in the West over the quality of India-made drugs, pharmaceutical exports from the country registered the slowest growth in at least 15 years of 1.2 per cent to $14.84 billion last fiscal.
Trade figures released by the commerce ministry showed that India's pharma exports totalled $14.66 billion in the 2012-13 financial year.
India's pharma exports had slowed to 5.9 per cent in the 2009-10 financial year and to 7 per cent in the calendar year 2000.
With no end in sight for the resolution of issues raised by the US, India will miss the $25-billion target the government has set for pharmaceutical exports from the country for the year 2014-15, say analysts.
The US, so far the biggest market for India's generic medicines, and a deciding factor for India pharmaceutical exports, is in no mood to lift regulatory curbs on India's cheap medicines without the country dilutes its IPR laws to benefit US drug firms.
The US accounts for about 25 per cent of India's pharma exports and is followed by the UK.
The Obama administration has been criticising India's investment climate and drug-related IP regime.
The US industry is alleging that India's IPR laws discriminate US pharmaceutical firms and are putting pressure on the US government for action against India (See: US weighing penal action against India over drug IP issue) ttp://www.domain-b.com/economy/trade/20140421_patent_law.html
The trigger was India's move to issue a compulsory licence in March 2012 to Hyderabad-based Natco Pharma to manufacture and sell a generic equivalent of Bayer's high-cost cancer-treatment drug 'Nexavar' at a low price (Natco granted compulsory licence for Bayer's Nexavar).
Following the US ban, countries like Vietnam too have raised concerns over quality of medicines imported from India, further complicating the problems for Indian industry.
Despite all these challenges, India remains one of the main sources of affordable health care and the pharmaceutical industry expects a growth rate of around 12 per cent in the current financial year.