Budget Watch: Series 3

* Import of pharmaceutical products from India should be allowed only through Duty Refund Process (DRP) under Excise Invoice which also increases government's revenue collection by about four per cent on total import.

*If any biotech product is developed within the country then the import of such products must be completely stopped to provide business incubation time for such companies.

*Import duty on drugs (which is five per cent at present) has to be modified to match with duty rates applicable in neighboring countries in South Asia. Pharmaceutical imports in India are subject to excise duties and VAT is also applicable in India.

*Registration procedures for drug import into Nepal must be revised to match with provisions of all SAFTA member countries. The company registration fee and product registration fee should be the same as per Indian regulations. Lower registration charges for foreign companies creates unfair competition for Nepali companies and also causes revenue loss to the government. Hence, it should be hiked based on similar fees applicable in India.

*Nepali pharmaceutical companies should get reciprocal opportunity to export their products to India. Nepal has allowed 225 Indian companies to market in Nepal whereas not even a single company from Nepal is allowed to sell its products in India.

*As capital cost for R&D of drugs and related substances including the development of herbal drugs is very expensive, the investment in R&D should be facilitated by providing tax benefits for such investments. Customs duties and VAT applicable on various high-end scientific equipment for biopharmaceutical and biotechnology research work especially of HS Code should be abolished and made tax free. Joint research and developments of drugs and related substances including the development of herbal drugs should also be promoted with the help of government institutions and companies including institutions like NAST and Nepal Medicine Laboratory within DDA.

*Government should promote Bulk Drugs Production (raw materials for Pharma Industries) in Nepal by providing incentives for such industries. This will help pharma industries in Nepal to compete in the world market.

*The government should invest resources in quality control of all drug products produced and imported into Nepal. There has to be proper legal mechanism to control the substitution of drug products in the market which is one of the reasons of poor recovery for critically ill patients. This is also a serious infringement of the intellectual property and brand capital of the companies in contravene to the existing regularly Trade Market and Patent Law of our country.

*Nepal should bring a National Research Policy to promote Research & Development specially in biopharmaceutical, biotech and industrial sectors. For investment in R&D, government should establish a 'Technology Development Fund' and provide cash subsidies for all research works which help develop technology on a commercial basis within the country.

Hari Bhakta Sharma,

Executive Director,

Deurali-Janta Pharmaceuticals