KARACHI: As Pakistan’s pharmaceutical sector aims to leverage its potential for increased exports, industry experts are calling for government support to create an enabling environment for growth.
Key officials express that with the right policy framework, exports could rise dramatically from the current levels. Industry leaders pointed out that while sectors such as textiles, carpets, leather, sports goods, and surgical instruments receive preferential treatment, pharmaceuticals have not enjoyed similar benefits.
The current export facilitation framework appears to favour established sectors based on past performance, overlooking the substantial potential of pharmaceuticals, which could significantly contribute to foreign exchange inflows.
Currently, Pakistan’s pharmaceutical industry has performed well in specific markets. Countries like Uzbekistan, Nigeria, and Afghanistan are among those where pharmaceuticals rank as major export commodities.
“Even based on existing performance, there are several countries where pharmaceutical products from Pakistan are the largest exported commodity,” underscoring the sector’s robust international footprint.
A former chairman of the Pakistan Pharmaceutical Manufacturers’ Association (PPMA) has already stated that the country’s pharmaceutical exports could reach $3 billion within the next five years if the government prioritises the sector in its export policies. In contrast, Indian pharmaceutical exports were projected to hit $28 billion, while Pakistan’s exports hit a historic high of just over $341 million in 2023-24.
Experts believed that a structured market development assistance (MDA) programme similar to India’s initiative could provide necessary support to local pharmaceutical companies.
Furthermore, they advocated for a thorough assessment of local API production capabilities before imposing duties, arguing that such measures can ensure affordability and competitiveness of Pakistani pharmaceutical products. The sector also faces challenges related to maintaining a stable supply chain and reliable raw material procurement, which are key to securing lasting agreements in foreign markets. As observed, foreign markets typically demand long-term contracts of up to seven years, creating a need for predictability in supply chains and procurement strategies.
With the government exploring avenues to generate foreign exchange and reduce dependency on debt, focusing on non-debt creating exports is critical. Analysts point out that despite significant rupee depreciation over recent years, the anticipated growth in exports has not materialized, suggesting that new strategies are necessary to unlock Pakistan’s export potential.
Copyright Business Recorder, 2024