Shortage of containers hits exports of pharmaceuticals from India

Peethaambaran Kunnathoor, ChennaiWednesday, April 7, 2021, 08:00 Hrs  [IST]

Exports of pharmaceutical products from India, especially from south Indian ports, have badly hit due to severe shortage of containers which are to come to Indian ports mostly from China which has cut down their exports to India and other countries following rise of Covid-19 cases.

Consequently, the shortage of containers has led to an increase in the freight rate with 60% hike in container price. The total shipment cost cannot be borne by both the exporters and the importing countries. Sources from pharma industry said because of Covid pandemic there is a slump in imports from China since the beginning of last year and it has not yet improved till date. They said the containers that come from China as import shipments are usually shipped out for exports.

As the situation becomes worse, the Tamil Nadu chapter of the Indian Drug Manufacturers Association (IDMA) has sought the intervention of the union commerce ministry to take measures to address the issue of container shortage faced by the pharmaceutical exporters since April 2020.

The pharma industry admits that the shortage of containers has hit the export of pharmaceuticals from all ports to different countries and the pharma has not started to pick up despite there is improvement in the overseas business of other goods.

In a letter to the Union ministry of commerce, SV Veeramani, former president of the IDMA and managing director of Fourrts India Lab, a leading pharmaceutical exporter in Chennai, has said that since there is a big fall in the import of goods from China, the exporters in India are not getting containers and the shipping lines have increased freight sixty percent of the earlier. This not only hinders the exports from Indian ports, but also affects the import of other countries where the buyers are unable to manage the total cost. He said IDMA has held discussion with the Pharmaceuticals Export Promotion Council (Pharmexcil) to take up the issue with the central government.

According to Veeramani, the import from China has come down because of the measures and restrictions taken by various countries in trade relations, especially by India and China, to contain the spread of corona virus disease since the beginning of last year. However, he said, the industry expects a relief from the government very soon.

“On one side the demand for containers is increasing, but on the other side the availability is less. So the prices of containers have gone up 60% which the exporters cannot afford. The total shipment cost has increased, accordingly there is big shortfall in our margin. We have to send our products abroad because we cannot keep them in our go-down for long. Now we have requested the ministry to do something to not affect the exports,” says Veeramani, the leading pharma exporter from Chennai.

When contacted, director general of Pharmexcil, Dr Revi Uday Bhaskar, said the container shortage has not affected the export of pharmaceuticals from India and it is growing.

“The issue of container shortage started long back and the council has taken up the matter with the government several times. It has not affected the export which is growing. But there are so many other factors in the shortage of containers which have to come from China. Day and night we are talking to many people, but I cannot explain all the details at present” Uday Bhaskar said.