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India sows the seeds while China reaps the harvest

Most of India’s medicinal herbs and plants are exported to China in the raw form, where they are processed and re-exported as expensive supplements, reports Sanchita Sharma.
Hindustan Times | By Sanchita Sharma, New Delhi
UPDATED ON JUL 18, 2007 02:19 AM IST

China's medicinal plants exports are 10 times India’s and here’s why: most of India’s medicinal herbs and plants are exported to China in the raw form, where they are processed and re-exported as expensive supplements to the $60 billion global market. But India is waking up to the opportunities.

“A lot of Indian exports go to China in the raw form, where they process, value-add and export it to the global market. To counter this, India is setting up export and processing zones in three states for the cultivation and processing of medicinal plants to capture the growing demand for alternative therapies abroad,” Minister of State for Commerce Jairam Ramesh told the Hindustan Times.

In 2006, medicinal plant exports from India were worth $200 million (Rs 800 crore) as compared to China’s $5 billion. The global market for medicinal plants is expected to cross $5 trillion by 2050.

The export zones — to come up in Uttarakhand, Chhattisgarh and Jammu and Kashmir — will help cultivators move away from collecting from forest areas to farming herbs and plants. “As much as 60 per cent of India’s exports are in the crude form, 30 per cent are finished and 10 per cent are partially prepared. Despite the country’s traditional knowledge of herbal medicines, our biggest export is isabgol (psyllium husk),” says Ramesh.

Manufacturers of alternative medicines such as the Himalaya Drug Company and the Bangalore-based Sami Labs have shown interest in being anchor investors and are guaranteeing purchase of the yield.

“It will be a public-private partnership where the state government will identify the land, the central government will provide the infrastructure, farmers will be mobilised through cooperatives and the private sector will buy the plants, process and sell them as finished products,” says the minister.

The bulk of the investment will be from the private sector. “The initial investment is expected to be not more than Rs 20 crore ($30 million), including the setting up of processing, testing and quality control labs,” says Ramesh.

Currently, medicinal plant cultivation is very small in India. The heath ministry says forests contribute to more than 90 per cent of the medicinal plants used for manufacturing medicines, and it fears that the growing demand for herbal products is putting an unsustainable demand on forests and threatening several species with extinction.

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