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The export of commodities frequently uses harmonized system (HS) codes, one of the systems used to classify industries. A system of names and numbers used to categorize traded goods is called the harmonized commodity description and coding system, or harmonized system (HS) of tariff nomenclature. In other words, a uniform numerical system for classifying traded goods is known as the harmonized system. Customs officials use it all around the world to identify products when determining tariffs and taxes and for data collection.
Indian trade clarification based on harmonized system
ITC-HS India introduced ITC-HS codes for import-export transactions. Indian custom use an eight-digit ITC-HS code to meet the needs of the domestic market. Indian custom use an eight-digit ITC-HS code to meet the needs of the domestic market.
There are two Schedules for ITC-HS codes; ITC (HS) Import Schedule I and Export Policy Schedule II. The DGFT (Directorate General of Foreign Trade) is responsible for all ITC-HS code modifications, formulations, and additions. As part of the continuous process towards perfection, tasks like commodity description, getting rid of outdated codes, adding new codes, changing product descriptions, etc., are occasionally undertaken.
ITC-HS and Ayush
The Indian Trade Classification based on Harmonized System of Coding (ITCHS) uses two HS codes - 30039011 for medicants (medicinal substance) and 30049011 for medicaments (a drug used for therapeutic purposes) to classify the export of ayurvedic products. Through the HS codes 30039012, 30039013, and 30039014 (for medicants) and 30049012, 30049013, and 30049014 (for medicaments), respectively, products of the Unani, Siddha, and homoeopathic systems are exported. The majority of the items used in the Ayurvedic, Homoeopathic, Siddha, Sowa Rigpa, and Unani systems, as well as herbal medicines and products from medicinal plants, are not designated under distinct HS Codes (International Harmonized Commodity Description and Coding System) codes.
Here it is worthwhile to elaborate the term Ayush. Ayurveda, Yoga & Naturopathy, Unani, Siddha, Homoeopathy, and Sowa Rigpa are all included in the acronym Ayush. Ayush medical methods have developed over centuries with the help of a wide range of conventional medical procedures.
Ayush exports
The "Herbal Medicine Market Research Report - Global Forecast until 2023" is a recent market study. During the review period (2018-23), it is anticipated that the market for herbal medicines would rise rapidly at a compound annual growth rate of 5.88%. The market's largest portion belongs to the herbal pharmaceutical sector.
This market category is predicted to grow above average, with a market worth of US$ 73,000 millions in 2023 from US$ 50,975.8 millions in 2017. Use of herbal medicines to treat chronic illnesses like cancer, arthritis, diabetes, insomnia, and other conditions is on the rise. The biggest market for herbal medicine has proved to be in Europe. By 2023, the European market is expected to have grown to a value of more than US$ 58,600 millions.
Pharmaceuticals, extracts, health/dietary supplements, medicinal plants/herbs, and other items are among Ayush's main exports. The USA, EU, and UAE are important markets for Ayush's exports. Most of India's Ayurvedic medications are exported to Nepal, Mauritius, and Sri Lanka. In the fiscal year 2023, India's exports of ayurvedic and herbal items had a value of roughly 628 million dollars. By FY25, it is anticipated that Ayush exports will total $23 billion. One of the most popular exports is aswagandha or winter cherry, and the USA is the main market.
The majority of India's homeopathic medicines are exported to Malaysia, Pakistan, and Sri Lanka. India, the world's top exporter of Unani medicine, sends the majority of its wares to Sri Lanka, Mauritius, and Nepal. What is the status of exports of Siddha medicine, no authentic data is available as seen in case of Ayurveda, Homeopathy and Unani systems of medicine.
A significant issue is the lack of harmonized system codes (HS Codes) for the export of Indian medicinal plants. The assignment of harmonised system codes has been cited as the principal barrier to the export of Ayurvedic medicines for more than 20 years.
In order to encourage the export of Ayush products, the Ministry of Ayush worked on developing a separate Indian Trade Classification-Harmonized System Code (ITC-HS Code) and new tariff lines under the Customs Tariff Act, 1975. The Ministry of Ayush formed a Task Force on Expanding Trade Classification, Quality Control and Standardization of Indian Systems of Medicine and Herbal Products and it has submitted a detailed report which recommended the allocation of new HS lines for ISM (ASU or Ayush) products, herbal products and medicinal plants products.
With the assistance of the Department of Commerce, the Ministry has established Ayush Export Promotion Council (Ayushexcil), the export promotion council for Ayush systems of medications, products, and services. Ayushexcil's objectives are to encourage the expansion of exports of Ayush products and Ayush healthcare services, to make it easier for members to gain knowledge of export procedures, to organize B2B meetings, road shows, seminars, and workshops on the export of Ayush products, and to protect scientific research in the Ayush healthcare sector.
In order to develop brand value for Ayush medicines and healthcare science, establish codes of conduct as general guidelines for manufacturers for trade and export, create a uniform classification system for Ayush and herbal products, conduct studies of the foreign markets for Ayush, and collaborate with other ministries and departments, including the ministry of commerce, to establish standards of quality and packaging for Ayush medicines, are all goals.
Current challenges
The makers of ASU (Ayush) pharmaceuticals have experienced issues exporting their medications or goods classified as pharmaceutical products under Chapter 30 of the HS codes, which require a license under the terms of the 1940 pharmaceuticals and Cosmetics Act and Rules. However, because Ayush healthcare systems are not recognized in many nations, the same items are exported as nutraceuticals or dietary supplements.
The Directorate General of Foreign Trade (DGFT) has been asked by the Union Ministry of Ayush to address concerns with the export of ASU (Ayurveda, Siddha, and Unani) medications under the harmonized system codes of pharmaceutical products.
Here creating a clear cut distinction between Ayush products and nutraceuticals or dietary supplements is very critical. In fact, definition of both should be kept in mind and different regulatory mechanisms should be identified. Further, distinction between medicinal plants used in Ayush and western herbalism should be established.
Ayush formulations are identified as drugs in some countries and nutraceuticals or dietary supplements in others. To add to the problem, some Ayush manufacturers have diversified into nutritional profile of the medicinal plants. Therapeutic profile and nutraceutical (nutritional) profile for medicinal plants is a separate chapter and well accepted by the industry.
Strengthening the Ayush sector at domestic levels is very vital. Ayush domestic market is very much different from Ayush global market. Both are vital for the blooming future of Ayush formulations and allied products and in this regard, critical steps for improving exports must be taken immediately. As highlighted in various articles, regulatory affairs in Ayush sector need to be strengthened as it has direct impact on the sales. ASUTAB, ASUDACC, NMPB and various task forces constituted by Ayush Ministry have a positive role to offer.
(Author is a herbal consultant, based in Mohali 160 062)
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