Build your plants in Russia, Moscow tells Indian drugmakers

New Delhi: Sanctions-hit Russia is looking to India for drug security at a time of shortages triggered by its war in Ukraine, a government official aware of the matter said.

Moscow has proposed financial support for Indian companies ready to build facilities in Russia, and is seeking higher pharmaceutical exports from India to meet domestic demand, the official said on the condition of anonymity. Last week, an Indian delegation led by Pharmexcil Director General, Uday Bhaskar attended the St. Petersburg Economic Forum to explore collaborations in the pharmaceutical sector, and discussed drug security and the role of small and midsize enterprises.

"The Russian Direct Investment Fund (RDIF) is ready to fund Indian companies who wish to tie up with local companies and work towards R&D. In the latest instance, Cadila Pharmaceuticals has signed up with RDIF and is working towards setting up a local manufacturing base in Russia. There are close to 20 Indian companies who got into some kind of engagement with Russian entities, out of which half of negotiations by SMEs are in advanced stages,” added the official.

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Generics giant

Queries emailed to a Pharmaxcil spokesperson and the Russian embassy remained unanswered.

India is the world's largest exporter of generic medicines, or authorized copies of patented drugs. In FY23, India exported pharmaceutical products worth $25.4 billion. The country has around 10,000 pharma units producing APIs, formulations, vaccines, biologicals and advanced therapeutics.

“India being a major producer of generics, and having capabilities for active pharmaceutical ingredients (APIs), our industries could certainly help others in offering generics, for production and supply of essential medicines and APIs. We can also collaborate with each other on research & development for innovation of new drugs and vaccines,” the official added.

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Exports to CIS

“Russia is not strong enough in the pharmaceuticals sector as it is in defence technology and oil sectors. However, we continue to supply medicines and other pharma products to Russia. Collaborating with our Russian counterparts will help us to learn from each other and provide opportunities for our industry to expand and strengthen our pharma trade," said Sudarshan Jain, secretary general at the Indian Pharmaceuticals Alliance (IPA).

Russia, meanwhile, has a strong research and development base in the pharma and vaccines sector, and hosts a number of leading pharmaceutical companies. It is already among top destinations for Indian pharma; however, last year, India’s pharma exports to Russia fell from $573.2 million in FY23 to $518.47 million in FY24.

“Our exports to the Commonwealth of Independent States (CIS) region were in a negative trend, may be due to Russia-Ukraine war. Besides, western sanctions might have been in the minds of Indian companies who have strong business in US, UK and European market. So, some companies were on the back foot,” the official added.

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Attracting India

To address the lower pace of trade, Russia is looking up to India to strengthen its production capacity.

“Establishing a generics manufacturing hub in Russia will help in overall growth and sustainability of the collaboration between the two nations in the pharmaceutical industry. Under its pharma 2030 policy, Russia aims to strengthen its local capacity and enhance their share of exports to the global world. They have taken measures in terms of giving additional perks to the local manufacturers and sourcing up government needs," the official said.

"They are trying to put up policies to attract local investors so that they acquire technology, build their in-house capacities in generics, APIs and biological space. They are working towards joint ventures and offering financial support to the Indian companies to attract them to set up their base in Russia provinces. In parallel, India is taking this an opportunity to improve its exports to Russia & Eurasian Economic Union (EaEU)," the official added.

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