Industrial Licensing

6. Import and Economic policies have undergone major changes like pruning of the Negative List for imports, doing away with the Actual User condition and full convertibility of Rupee on trade account. In this changed scenario, it is felt that there is no need to be more restrictive than before in granting industrial approvals, provided the two main concerns i.e., achieving basic stage manufacture and discouraging undue imports, are adequately taken care of. Under the circumstances, these objectives can be achieved only through the tariff mechanism and the EXIM Policy and as such Industrial Licensing and conditions stipulated therein have lost their relevance. It is also felt that, like in the other sectors of the economy, production would get the necessary impetus to meet any future demands as well as of ensuring adequate availability of drugs at reasonable prices if a more liberalised regime is operated in granting industrial approvals. Many of the drugs reserved for the Public Sector Undertakings have lost relevance vis-a-vis production programme of these units. Therefore, there is need to prune the list of items reserved for the Public Sector to only a few select items, where capacity in Public Sector is adequate to meet the country's demand and heavy public investment has been made.

Research and Development

7. The Drug Industry is a highly R&D oriented sector in which there is a very high rate of obsolescence. This sector has also been identified as one of the thrust areas for exports. There is, therefore, need to ensure that the technologies used in the country are cost effective and efficient. It is necessary to attract greater investment into this sector in order to update the existing technologies and for bringing into the country technologies which are not currently available. At the same time it has to be noted that the Indian companies have achieved considerable stature in terms of production as well as in marketing ability and indigenous technology has also reached a commendable level in many cases. However, in view of GATT accord and impending changes in Patent Laws, the subject matter of Basic Research in drug sector has assumed greater importance and needs to be attended to on an urgent basis.

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