Even after almost a year, the proposal to set up a warehouse in Russia exclusively for the pharmaceutical industry to give a boost to exports to that country is gathering dust in the shelves of Union commerce ministry. Russia is a fast growing pharma market which has been witnessing 20 per cent annual growth which is considered a healthy growth. Nothing has moved in the ministry on the proposal during the last about one year since the proposal was mooted, it is learnt.
As per the proposal, the ministry was to set up a warehouse in Russia exclusively for the Indian pharmaceutical industries and was to rent out the warehouse to the industries on a subsidised rate. The proposal envisaged a reimbursement of 75 per cent in the first year, 50 per cent in the second year and 35 per cent in the third year of the establishment of the warehouse. The ministry was to engage the services of government agencies like Central Warehousing Corporation (CWC) for the project.
Russia, including the CIS countries, is a fast growing pharmaceutical market and the new facility, once established, will prove to be a boon for pre-custom and post-custom clearance warehousing for the pharmaceutical industries, especially the small and medium companies who cannot afford either their own warehousing facilities or the ones run by the private operators. Due to the lack of warehousing and other problems, the export market is dominated by big players and the setting up of a warehouse by the government will make export financially viable to the small and medium players.
According to data available with the Pharmexcil, Russia is a fast growing pharmaceutical market and Indian export to Russia stood at Rs 1227 crore during the last financial year. The Russian pharma market is growing at a pace of more than 20 per cent which is considered very healthy.
After the proposal, the ministry had made some groundwork on the proposal. It had asked the industry to submit their comments and inputs on the proposal like the exact area of requirement, whether the demand is for cold storage or normal warehousing, whether the exports include only formulations or API, etc.
The Pharmaceutical Export Promotion Council (Pharmexcil) had also some time back proposed the setting up of a warehouse in Russia so as to enable the exporters to store the goods in the warehouse and to make ready availability of their products for entering the local market in Russia. Apart from a warehouse, the industry is also demanding a Pharmexcil office in Russia to facilitate export growth in the region which has enormous growth potential.