The growing global mistrust of China in the wake of Covid-19 crisis would ultimately provide an opportunity for India to consolidate its place in international trade, as it had certain inherent strengths it could harness, said Ramesh Chandra Joshi, Professor & Chairperson (International Collaborations & Research) as the Indian Institute of Foreign Trade (IIFT).
“Pharma and dairy are two areas where India can make quick gains. In pharma, our export has already escalated to a sizeable scale. And with largest production capacity in the world, dairy is well poised to become our major strength in the global trade in the coming years,” Joshi told indoasiancommodities.com in an interview.
Stressing on harnessing dairy strength to improve India’s positioning in global trade, Joshi underlined that it was well poised to lead the quantum jump in agri-exports as envisaged by the government.
“With over 160 million tonnes of production capacity, dairy is a major strength of India which can be easily harnessed to increase exports. In fact, last year India had opted out of The Regional Comprehensive Economic Partnership (RCEP) because of the pressure from the dominant domestic dairy industry. It is an extremely promising sector for India in the near- to medium-run, capable of being one of the key drivers of our agri-exports basket in the coming years,” Joshi explained.
Indian dairy exports in 2018-19 were worth $345.71 million, which is considered to be below par given country’s global leadership positioning in milk production. However, on a low base, milk products like skimmed milk powder, butter, ghee, cheese, cream and curd have shown hefty double-digit export growth numbers in recent years.
Of India’s total exports of $313 billion, pharma exports were $20.6 billion in 2019-20. Even at the beginning of the current fiscal, when exports in April slumped by a staggering 60 percent as Covid-19 crippled economic activities, pharma stood out as one of the two product categories with monthly positive growth.
“We are already a big supplier of generic pharma in the US and other countries and have proved to the world our capability to produce effective drugs at affordable prices. The pharma manufacturing pricing difference between US and India could well be between 10 to 200 times. India can score big on this front in the new global economic order which may emerge after this crisis,” he said.
He, however, added that Indian pharma companies would need to reduce their over-dependence on China for import of raw material for basic drugs. “Indian pharma companies intending to make it big in the international market will need to have a greater control of their production value chain,” he pointed out.