India likely to extend credit line to Sri Lanka for essential drugs
India is likely to extend a credit line for essential drugs to Sri Lanka, in a bid to bail out its southern neighbour. A meeting was convened on Tuesday evening, attended by some pharmaceutical exporters, representatives of the Pharmaceutical Export Promotion Council (Pharmexcil), representatives of the Ministry of External Affairs (MEA), among others, to discuss the modalities.
The amount of the line of credit to be granted is not yet known. At the moment, exporters are awaiting clearances from banks on currency-related issues, and shipments will be dispatched soon, a source with knowledge said.
A senior government official confirmed the development and said Pharmexcil will coordinate the export of essential drugs from India to Sri Lanka. “Sri Lanka needs essential medicines. They had reached out to India – the pharmacy of the world. We are trying to figure out the best way to deal with this…and a line of credit will likely be extended,” the official said.
As such, India has already extended lines of credit and foreign exchange swaps worth over $3 billion to Sri Lanka.
Sri Lanka, which imports nearly 85% of its drugs, has contacted Indian industry bodies asking for help. A source from the Indian Drug Manufacturers Association (IDMA) said that Sri Lanka has provided a list of 273 essential medicines including antibiotics, painkillers, injectables, chronic medications such as heart and diabetes etc. . “Some of our member companies have already started exporting drugs to Sri Lanka, but this is done more as an aid. If they need more volumes, a line of credit from the Indian government is the best way to do it,” added the industry official.
Another IDMA official pointed out that a huge volume of drugs cannot be exported to Sri Lanka as there is no guarantee of payment. “Indian exporters would therefore need government support, and today (Tuesday) there is a stakeholder meeting,” the official added.
Already, states like Tamil Nadu have come forward to help Sri Lanka. Tamil Nadu Health Minister Ma Subramanian and Health Secretary J Radhakrishnan on Saturday inspected a warehouse in Chennai where medicines to be sent to Sri Lanka are stored. The state government had urged the Center a few weeks ago to allow it to send basic necessities to Sri Lanka (rice, pulses, medicines, dairy products).