According to the economic think tank, Indian Council for Research on International Economic Relations (ICRIER), there is an untapped trade potential of USD1.6 billion between India and Pakistan. Exploring this untapped potential can lead to boosting the trade and competitiveness of the two countries, a recent study done by ICRIER pointed out.
According to the study, the pharmaceutical market of India ranks as the third largest in the world in terms of volumes and in terms of value, it stands at fourteenth. During 2011, Indias pharmaceutical market was estimated at USD 21.7 billion. On the contrary, Pakistans pharmaceutical industry is the tenth largest in Asia Pacific and was valued at USD1.63 billion (2011). This reflects that Indias pharmaceutical market is nearly thirteen times the pharmaceutical sector in Pakistan. Opening up of bilateral trade can enable Pakistan to get a hold of a market which is many multiples of its own and has yielded remarkable results over the past many years.
Research and development remains at the core of a pharmaceutical sectors competitiveness. The study highlights that India spends nearly 6-8 percent of its revenues on research and development while the 30 leading Indian pharmaceutical companies spend almost 20 percent of their turnover on research and development. By joining hands with India, that is considered to be a big regional player in the pharmaceutical market, Pakistan can potentially rack up the benefits of Indias growing research and development capacities and experiences.
By the same token, since the pharmaceutical market in Pakistan lacks the presence of FDA approved plants for testing purposes, access to Indian pharma market having 150 FDA approved plants could even make it possible for Pakistan to use those laboratories and even save costs. Also, with little FDI flow between the two countries, high bilateral trade can also lend a hand in boosting bilateral FDI in the long term, the study added.
While the fears and apprehensions of small pharmaceutical players are justified, trading with Indian drugs will lead to survival of best quality medicines by fuelling competition in the industry, according to ICRIER. But to make that happen, removing trade barriers including wiping out the negative Indian import list maintained by Pakistan needs to be seen in a new light.