The Covid-19 pandemic has proved to be a global health crisis, whose cascading effect has already grappled the global economies. With multiple spread waves and new virus mutants, the hope for economic recovery seems to be imperceptible. The World Bank envisions a baseline forecast of 5.2 percent contraction in global GDP in 2020 which may plunge most countries into recession in 2020, with per capita income contracting in the largest fraction of countries globally since 1870. India alone lost Rs 32,000 crore ($4.5 billion) every day during the lockdown, slowing the economy at an estimated 8% by Fitch Ratings. Although all the sectors are seeing an impede in growth, the pharma industry has turned out to be the blue sky after the storm, with resilient capabilities and future potentials.
Now with the White House considering a temporary waiver of some Trade-Related Aspects of Intellectual Property Rights (TRIPS) rules, India will be able to expand its vaccination exports and research capabilities to African markets without inviting any sanctions from WTO. Southern and western regions of Africa are the largest importers of Indian medicines. These include several generic drugs that cost only a fraction of those produced by Western companies.
The catastrophe has opened up the deep gaps in the interdependencies born out of globalization. The global supply chains have been disrupted and trade deals halted with zero global mobility. The crisis has upheld the urgency of self-sustaining economic war chest and has given a thrust to the Aatmanirbhar Bharat dream. It's now clear that the world, including India, is so dependent on China for essential supplies of medicines. In fact, 50% of the Active Pharmaceutical Ingredients (APIs) used in India are imported from China. This technically makes China control the prices and supply of these ingredients, which are used in generic drugs. Since generic drugs manufacturing compose 70% of the Indian pharma industry, this high concentration in supply chains has increased the unsystematic risks for the industry. However, this fact has proved to be a silver lining for the Indian pharma sector, which has established itself as a global leader over the last 50 years. During such unprecedented times, the world is looking towards India to provide an alternative for a supply viscous China and steer them through the pandemic.
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