The pharmaceutical industry is building the future of India

The pharma industry is a booming industry with sales and marketing executives working extensively for its widespread. However, a new model will now takeover with a major shift in pharmaceutical industry from mass market to target market methodology in order to augment profits. The future of the pharma industry seems to be very bright in India as it is the third largest pharma industry throughout the world. The Indian pharmaceutical industry is emerging as the best industry to invest in, thru the world and many multinational pharma companies are doing fairly well in India in comparison to other countries worldwide. The industry has low risks with augmented returns and great potential of growth due to which several investors are directed towards the industry.

The government of India has introduced privatization and globalization of the pharma industry which has augmented the growth and with great incentives for development and research in this sector, the industry is gaining new heights. The government also provided several financial policies to the companies in order to carry out research and development. Many other processes were also introduced which will make the future of pharma industry very optimistic. The future of Indian pharmaceutical industry foresees that our country will reach to top 3 positions in the global market by the year 2020 in terms of pharma with awesome growth. Even today, about 20% of generic medicines are exported thru the world from India and the industry has all the potential of growth with skilled workers, technical aptitude and low cost production. With the increase in the number of pharma companies, there is scope for more employment for the populace and thus the future is foreseen as very bright.

In the future the industry will require exhibiting to the patients that their brand is a premium one and will need to offer a complete package with health services and their products in order to get exceptional payments for their brand. The marketing and sales function will change drastically to get higher growth in the future and several changes are expected in the business settings, which will further influence the growth in the pharma sector. The business models which are presently functioning will however not be apt for the year 2020 and more innovation in collaboration is required to acquire desired growth in the sector. 

In the future the companies will require amplifying supply chain models for different products for different patients and utilize the chain to differentiate the market. Around 75 percent of renowned companies worldwide are Indian and the future of the companies is very bright. With the development of pharma companies, the economic growth of the country will also augment which will enhance the welfare of the people. With the availability of a large quantity of raw materials and skilled workers India is becoming a hub of manufacturing and research. Cost of manufacturing medicines is around 35-40 percent lower in India as compared to the USA due to low cost of installation and labor. With the introduction of GST in the market, pharma companies are expected to get a major boost as their tax structure is simplified. Major increase in exports and controlling of imports is also strengthening the sector along with several government policies to help in the production and research.

On June 30, 2017, the scenario of India had been changed. Everyone was just sitting in front of their television set to keep the track on GST. When the Goods and Service Tax (GST) was announced by PM Narendra Modi and President Pranab Mukherjee, there was a positive change in the chemical and fertilizer sectors.

India is ready to buckle up for a significant transformation in the infrastructure. GST is regarded as the ideal persuasive tax reform in India. This is the most significant step taken by the Government of India.

What do you mean by GST?

GST is designed to become a hardheaded alteration in the tax, which aimed to simplify the difficulty of the existing tax system. This in turn results in lowering down the production cost of goods and services. GST is defined as a tax that is accountable for input credit tax liability. The liability can be charged and assessed at each step of the transaction.

The buyer can easily sell the chemical after the first transaction. According to the existing tax system, the rate has to be added to the tax paid by customer. Whereas, in GST the second buyer can easily claims the input tax as a credit to the resale transaction tax.

Role of farmers

In our country, because of the farmers we are able to eat enough. They add up to the benefit of INR 1261 crores as per GST regime. According to the new law, the MRP will reduce to INR 5909/Ton when compared to existing laws.

Before GST

Food items like rice, sugar, wheat, salt. Flour and wheat are totally exempted from CENVAT. Cereals and grains are also taxed at the rate of 4% under VAT. There are lots of the licensing process and number of indirect taxes applied on agricultural products. There are certain exemptions present from state VAT for food products like eggs, fruits, vegetables and meat

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How GST has an impact on the agriculture and chemical sector?

The GST is a vital step in order to improve the reliability, timeline and transparency of supply chain mechanism. This is ideal for ensuring the total reduction in wastage and overall cost for the farmers or chemical retailers. Additionally, it also helpful in reducing the price of heavy machinery meant for making agricultural and chemical products.

Thus, the overall application of GST looks positive, especially for agricultural and chemical industry. The tax has shown a tremendous rise in the production cost of vital chemicals, resulting in a price-hike of the end product. The latest introduced GST is trusted to become the unbarred progress of chemical and fertilizers industry.

Because of the increase in the inflation index, there is anticipated rise in the cost of agricultural and chemical products. Due to the GST implementation, there is going to be lots of benefits to farmers and chemical distributions. If we talk about the future, GST emerges out as a promising aspect and serves the industries with long term interest. The long sighted vision of PM Modi has increased the chances of economic growth.