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Supply of life-saving medicines affected by ‘Make in India’ policy

Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Supply of life-saving medicines affected by ‘Make in India’ policy:


Context:

The Ministry of Railways has written to the Department for Promotion of Industry & Internal Trade (DPIIT) seeking exemption for procuring certain medical items manufactured outside India, particularly medicines used in the treatment of COVID-19 and cancer.

What’s the issue?

In the existing ‘Make in India’ policy, there is no window available to procure such items from the suppliers who may not meet the Local Content Criteria required for Class-I and Class-II Local Supplier category.

  1. Class-I is a local supplier or service provider whose goods, services or works offered for procurement have local content equal to or more than 50%.
  2. Class-II is a supplier or service provider whose goods, services or works offered for procurement have local content of more than 20% but less than 50%.

Only these two categories of suppliers shall be eligible to bid in the procurement of all goods, services or works and with estimated value of purchases of less than ₹200 crore.

How is this affecting?

Certain drugs used in cancer treatment were manufactured outside India but available in the Indian market through agents or dealers. Without meeting the prescribed requirements, items cannot be procured from such agents.

Conclusion:

The uninterrupted supply chain of these medicines and medical items are essential in the human life saving category and providing satisfactory health care to all railway employees and their family members.

About ‘Make in India’ Policy:

On September 25, 2014, the Indian government announced the ‘Make in India’ initiative to encourage manufacturing in India and galvanize the economy with dedicated investments in manufacturing and services.

Targets:

  1. To increase the manufacturing sector’s growth rate to 12-14% per annum in order to increase the sector’s share in the economy.
  2. To create 100 million additional manufacturing jobs in the economy by 2022.
  3. To ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (revised to 2025) from the current 15-16%.

Outcomes so far:

  1. Foreign direct investment (FDI) has increased from $16 billion in 2013-14 to $36 billion in 2015-16 but it has not increased further and is not contributing to Indian industrialisation.
  2. FDIs in the manufacturing sector are becoming weaker than before. It has come down to $7 billion in 2017-18 as compared to $9.6 billion in 2014-15.
  3. FDIs in the service sector is $23.5 billion, more than three times that of the manufacturing sector which shows Indian economy’s traditional strong points of having remarkably developed computer services.
  4. India’s share in the global exports of manufactured products remains around 2% which is far less than 18% share of China.

InstaLinks:

Prelims Link:

  1. MII initiative.
  2. Targets.
  3. Share of the Service sector in GDP.
  4. Local requirement criteria under the policy.

Mains Link:

Discuss the performance of MII initiative.

Sources: the Hindu.