"Correcting the inverted duty structure is a move in the right direction but its impact on the pharmaceutical industry will have to be seen," says D.G. Shah, Secretary General of the Indian Pharmaceutical Alliance (IPA), which has major Indian pharmaceutical companies as its members. "The government has also been wanting to encourage manufacturing of raw material - basic drug ingredients - in India under its API (active pharmaceutical ingredients) initiative but if raw material import duty goes down to that extent it will be a challenge to manufacture those raw materials in the domestic market."
Overall, the Budget offers no direct benefit to the pharmaceutical industry, though it is certainly positive for the health-care sector. Because of various initiatives, the net disposable income for the middle class goes up, which again could mean more money going into health care. "It's a good overarching Budget which is now destination-focused not merely directional," says Kiran Mazumdar-Shaw, Chairman and Managing Director, Biocon.
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