Policy reforms in the Indian pharmaceutical sector since 1994 - Impact on exports and imports

Liberalisation measures in the pharmaceutical sector have brought about major changes in the industrial licensing policy, import restrictions, foreign direct investment and production controls. It was feared that firms would shift from indigenous production to imports, especially of bulk drugs, and this concern was aggravated with the change in the patent law. This paper finds that these apprehensions have only partly come true. Exports of formulations have grown faster while their imports have not registered any jump, keeping the balance of trade positive.