Removal of non-tariff barriers (NTBs) will give a boost to pharmaceutical exports from India to China, the Federation of Indian Chambers of Commerce and Industry (FICCI) said.
"India's exports of pharmaceuticals could make a significant dent in the Chinese market and help meet overall trade expectations of $30 billion by 2009, provided non-tariff barriers in the shape of procedural, legal and cultural barriers that hinder market access are removed," said a FICCI statement.
According to FICCI, India's export of drug, pharmaceuticals and fine chemicals to China have grown a meagre three per cent from $106 million in 2003-04 to $109 million in 2004-05.
On the contrary, India's pharma export to other markets of the US, Europe, Africa and South America have grown by 19 per cent year-on-year in the last three years.
The FICCI has thus suggested for effective identification of the various non-tariff barriers in the trade between India and China and address them step-by-step.
It has also recommended for simpler trade financing and greater cooperation between the export-import (EXIM) banks of both the countries.
Citing some of the barriers, FICCI pointed out lack of transparency in information about local markets and trade statistics add to the low awareness of foreign businesses in China, which hampers marketing strategies of Indian pharma companies in China.
The industry body is also of the view that language poses a major barrier to trade and in Chinese market drug distribution is mostly through hospitals.
"It is for the Chinese now to set the ground rules right and ensure that all non-tariff barriers are removed. At the same time, China needs to ensure that the quality standards are maintained in pharmaceutical products," the statement said.
In 2005, both the countries, often regarded as the world's fastest growing economies, had signed an agreement pledging to bring the bilateral trade volume to $20 billion by 2008.
According to Goldman Sachs, India will overtake the US to become the world's second largest economy after China by 2042.