Medicinal aid is one of the major relief that a developing and needy country seeks as it takes decades for a country to overcome a health crisis. In the past three years, India is not only growing as a net donor but also as a preferential player in the pharma industry in terms of trade, manufacturing and R&D
. India has made its mark not just in these areas but has established itself as the tenth largest pharma exporter in the world. While earlier the country was portrayed as a poor and backward nation, the country is quickly becoming a big threat to the developed pharma market and leading it to become a credible pharma aid donor. According to the Indian Brand Equity Foundation (IBEF), India is the third-largest exporter of pharmaceutical products in terms of volume.
Last year in March, the then Minister of State External Affairs General V K Singh declared in the parliament that India is a net donor of foreign aid. In the year 2015-16, though India was a recipient of Rs. 2,144.77 crore aids from foreign countries and global bank, it has also provided aid of Rs 7719.65 crores to the countries suffering from crisis in various sectors such as education, health, infrastructure, militant, and economy.
With all the above facts of emerging Indian pharma market, a question arises that even though 30% of the population in India is Below Poverty Line (World Bank), how has it managed to become a country that lesser fortunate countries turn to for aid, help and relief and thereby it is trying to help itself in becoming a leading country? Why has India become a preferred trade partner and investor for lesser developed countries?
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While India is still walking between being a “developed” and a “developing” country , many war-torn countries are looking for assistance from Indian Pharma companies to overcome the problem like major health crisis and lack of vaccines. Most of India’s foreign aid is directed towards its neighboring countries like Bhutan, Sri Lanka, Afghanistan, Africa and other Middle East Asian countries who are the biggest recipients of India’s assistance. An analysis by Devex says that 84% of the Indian foreign aid is directed towards South Asia and 63% is directed to Bhutan.
However, foreign aid is not any charity. In the contemporary times, it is used as a strategic tool for various ends – consolidation of donor’s status of regional, continental or global power, strengthen cultural or diplomatic relations, to provide infrastructure needed by the donor for resource extraction from the recipient country or to gain other kinds of commercial access. India Developing Aid to foreign countries serves as a strategic tool for the country. The effort to raise the assistance is a conscious effort on part of India, to further bolster its role as an emerging global player.
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Not only a medicinal assistant but countries like Africa, Latin America and other from Middle East Asia are keen to have Indian pharmaceutical companies invest in their expanding health care systems and many are seeking joint ventures in various areas ranging from establishment of hospitals and clinics to setting up units manufacturing drugs and medical equipment.
In India, the cost of setting up a production plant and the labor cost are 40-55% cheaper than the western countries. This cost efficiency continues to create opportunities for Indian companies in emerging market. Due to the exports of affordablegeneric drugs to the region, in contrast to the costly patented products supplied by MNCs (Multinational pharma company), India is quickly becoming the preferred partner for slow growing pharma market with an aim to put pressure on MNCs and local drug-makers to increase the availability of generics and reduce the cost of medicines.
Since decades, India is known for its medical tourism, however, going beyond its capacity; the country is gradually leading as a medicinal facilitator. Not only the government or any NGO but also the private pharma distributors are going beyond their profit to help the war-torn countries especially those suffering from health crises.
Whether it’s during the war in Yemen or providing basic medical aid to African countries, India has emerged as a big source of aid to countries both near and far from her.
With this strong foothold in the pharma sector, India represents a robust pharma market. Its growing success has helped enhance the image of not only Indian companies but also India as a whole. It is without doubt for these reasons that this country will lead the race to becoming a developed country.