New Delhi: Pharma sector, which has trade potential of USD 1.63 billion between India and Pakistan, can be an ideal area to improve bilateral relations, says a study by economic think-tank Icrier.
Allaying apprehensions among small players in Pakistan over the influx of drugs from India, it said the competition will eventually lead to survival of best quality pharma items in that country.
"Consultations with stakeholders on both sides have revealed that pharmaceutical firms realise the possibility of huge benefits from increased trade and investment," said the Icrier working paper - India-Pakistan Trade: An Analysis of the Pharmaceutical Sector'.
There is substantial trade complementarity and high trade potential of USD 1,635 million in pharmaceuticals between India and Pakistan, it added.
Underlining the role that trade in the pharma sector can play, the Icrier study said: "An industry sector like pharmaceuticals, with 'high social value' and having direct relation to the health and well-being of consumers, would be an ideal segment to enhance trade and improve relations between the two countries."
It said that to give a push to trade in pharma, it is imperative that the negative list maintained by Pakistan for import of Indian items should be done away with.
"In fact, competition from Indian products can only benefit consumers and this is critical in the health sector, particularly in developing economies," it added.
The paper noted that some groundwork in harmonising policies towards FDI in pharma sector seems necessary.
"Traditional medicine is another significant area with large potential requiring substantial policy interventions. Herbal, ayurvedic, Sihdha and Unani medicines are common to both India and Pakistan," and initiatives here could enhance trade between the two countries, it added.
Bio-pharmaceuticals is another sector with great potential and as an upcoming field, it has a lot of scope in the sector, the study said.
Harmonisation of regulatory regimes is a prerequisite for smooth and uninterrupted trade, it added.
"The lack of a standardised regulatory framework with respect to manufacturing and the lack of FDA approved laboratories in Pakistan have acted as barriers to trade in pharmaceuticals products," the study said.
It also recommended the necessity to sign mutual recognition agreements that specify standards to be enforced on the drug industry in both countries if pharma trade between India and Pakistan is to be expanded.
