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Strengthening Ties: India and Russia Forge New Path in Pharmaceutical and Healthcare Sectors

The two-day visit, which took place on July 8-9, 2024, was highlighted by multiple rounds of talks between PM Modi and Russian President Vladimir Putin during the 22nd annual bilateral summit.

• By Pooja Chaturvedi Sah
• New Delhi
• Jul 10, 2024

News

Prime Minister Narendra Modi's recent visit to Russia has marked a significant milestone in Indo-Russian relations, particularly in the pharmaceutical and healthcare sectors. 

The two-day visit, which took place on July 8-9, 2024, was highlighted by multiple rounds of talks between PM Modi and Russian President Vladimir Putin during the 22nd annual bilateral summit. The summit emphasized enhancing bilateral trade, economic cooperation, and strategic partnerships between the two nations, with a keen focus on the pharmaceutical and healthcare industries. 

Key Discussions and Agreements

During the bilateral discussions, several key points were addressed, aiming to elevate the bilateral trade to $100 billion by 2030, balance the lopsided trade, eliminate non-tariff trade barriers, and explore the possibility of a Eurasian Economic Union (EAEU)-India Free Trade Area. A joint statement issued after the talks revealed plans to establish a bilateral settlement system using national currencies and the introduction of digital financial instruments into mutual settlements. 

Prime Minister Modi was honored with the ‘Order of St Andrew the Apostle’ award by President Putin for his significant contribution to fostering bilateral ties between the two countries. The leaders also discussed the development of the Russia-India Special and Privileged Strategic Partnership, highlighting economic engagement and setting new targets for bilateral trade. 

Boosting Pharmaceutical and Healthcare Cooperation 

One of the critical areas of focus during the summit was the pharmaceutical and healthcare sectors. Both nations agreed on several initiatives to enhance cooperation in these fields. The discussions included the development and supply of medicines, advanced medical equipment, and the potential for opening branches of Indian medical institutions in Russia.

The recruitment of qualified medical personnel and strengthening coordination in medical and biological safety were also high on the agenda. For the past two years, Indian pharmaceutical companies have significantly increased their presence in Russia as Western competitors have withdrawn from the market due to sanctions against Moscow. 

India has now become Russia’s foremost supplier of pharmaceuticals, surpassing Germany. This surge in Indian exports has seen nearly 294 million packages of medicines delivered to Russia, marking a 3% rise from the previous year. 

Expanding Manufacturing and Local Collaborations 

Around 20 Indian companies are currently engaged with Russian entities to set up manufacturing units. These collaborations focus on strengthening local manufacturing capacities for active pharmaceutical ingredients (API), injectables, anti-cancer medicines, and hormonal products, among others. Moscow has proposed financial support for Indian companies ready to build facilities in Russia, aiming to meet the increasing domestic demand for pharmaceuticals. 

In December 2023, Pharmexcil entered into a Memorandum of Understanding (MoU) with Roscongress Foundation to develop the pharmaceutical and related industries. This collaboration aims to enhance technology transfer, capacity building, and joint research and development of new drugs and vaccines. The establishment of a special economic zone for APIs and the creation of a ‘bulk drug park’ are also on the agenda. 

Joint Ventures and Investments 

The Russian Direct Investment Fund (RDIF) has shown readiness to fund Indian companies willing to partner with local firms for research and development. For instance, Cadila Pharmaceuticals has signed an agreement with RDIF to set up a local manufacturing base in Russia. 

Approximately 20 Indian companies are engaged in negotiations with Russian entities, with half of these negotiations by small and medium-sized enterprises (SMEs) in advanced stages. Despite the increasing collaboration, India's pharma exports to Russia saw a slight decline last year, from $573.2 million in FY23 to $518.47 million in FY24. 

However, Indian pharmaceutical firms continue to broaden their business prospects in Russia. In 2023, Mumbai-based Oxford Laboratories significantly increased its shipments to Russia by 67%, reaching 4.8 million boxes. Their product range includes medications for cardiovascular issues, erectile dysfunction, ophthalmic conditions, and more. Similarly, Ipca Laboratories boosted its exports by 58%, reaching 13.7 million packages last year. 

Future Prospects and Initiatives 

The Novosibirsk region of Siberia has recently extended an invitation for cooperation with Indian companies in the pharmaceutical and medical industries. This initiative aims to foster international collaboration and advance enterprises and organizations in the region. 

Pharmexcil, the Pharmaceuticals Export Promotion Council of India, has urged its member-exporters to explore potential collaborations by directly contacting the listed organizations specified in the proposal. The proposed collaborations include opportunities for Indian companies to export a variety of products to Russia. 

The communication received from the Economic and Commercial Wing at the Embassy of India in Moscow outlines these prospects and emphasizes the potential for mutual growth and development in the pharmaceutical and healthcare sectors. 

Prime Minister Modi's visit to Russia has laid a robust foundation for enhanced cooperation between India and Russia. The agreements and initiatives discussed during the summit will not only bolster the pharmaceutical and healthcare industries but also contribute to the overall economic growth and development of both countries.