INDIRECT TAXES
| Drug import: Finance Ministry says no to anti-dumping duty Sat, 23 Apr 2011 02:03:04 GMT |
| NEW DELHI: The finance ministry has turned down a government body's recommendation to impose anti-dumping duty on import of two key drug ingredients from China and Mexico, used to make antibiotics worth about. Rs 3,000 crore, two senior industry executives said. In January, the commerce ministry recommended duty of $2.5 per billion on units of Penicillin-G imported from China and Mexico. Further, it had also proposed duty of around $9.28 per kg on 6-APA imported from China after Indian suppliers complained Chinese and Mexican firms are shipping it at a low price to kill competition from Indian manufacturers. This is the second time the finance ministry has rejected recommendations by Directorate General of Anti-Dumping & Allied Duties, the nodal investigating agency of the commerce ministry. Last year also, it had sought a similar provisional suggestion saying that the prices of popular antibiotics may increase. There were fears among some sections of the industry that price of popular antibiotics Mox, Augmentin and Sporidex would become costlier by as much as 25%. But executives from local suppliers say that the finance ministry views are not rational. They say Chinese companies would invariably hike the price once the threat from local firms subsides, thus hiking cost of antibiotics. This is a strategy they have successfully adopted for some years now that had forced few Indian companies such as JK Pharmachem , Torrent to shut down, while restricting capacities of existing manufacturers such as Vadodara-based Alembic and Chennai-based SPIC. Besides, the country would remain hostage of Chinese suppliers for these key antibiotics. Several brand drugmakers who prefer to buy the antibiotics from low-cost Chinese suppliers said that the two Indian firms are unable to meet the local industry's demand. The suppliers such as Alembic and SPIC, on whose complaints the DGFT carried out the study before making the recommendation, said they can meet the demand of local market. "The government PSU and unused capacity at SPIC can be used to meet the demand of exports also," one of them said. The local makers of the two ingredients were hopeful of a nod from the finance ministry because the pharmaceutical department had backed the levy. |
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