- What are your expectations from the post-corona phase from a business point of view?
If the current scenario is any indication, healthcare will continue to be one of the most impacted sectors – patients are only focusing on life-critical surgeries. Elective procedures are being completely avoided.
For the manufacturing segment, raw materials supplies are at an all-time low. In the Medical Devices segment, there are major woes related to supply chain management, raw materials etc. This is being further compounded by the inverse duty structure which favours finished products (imported IVDs) over raw materials (made in India IVDs) – consequently leading to an unequal playing field for all domestic producers of IVD devices.
But I have a very positive outlook for our healthcare industry – the Covid-19 outbreak has provided us with a unique opportunity. There is a possibility of the world focus shifting from China to India as the primary producer and supplier of APIs, IVDs and generic drug, provided we are prudent enough to act fast and cash in on the situation. India has the potential to become the alternative supplier to global drug manufacturers replacing China due to growing distrust and possible sanctions against them.
- Do you see a shift in the perception for your company within clients, government and overseas market?
Yes, I do perceive a major change. Most of the healthcare segment companies have been behind the scene or ancillary companies. They have been either unknown or not given too much of importance. The current scenario has drawn a lot of focus to the healthcare industry and its contribution. Its criticality and yeoman services are being re-established, recognised and appreciated.
In the history of mankind this is probably the first time when diagnostics industry has been in the absolute spotlight. We have suddenly moved from under the carpet to over the carpet necessity. The world has recognised the need for early warning systems in the healthcare segment – currently for Covid-19, but this trend is going to continue for all forms of diagnostics in the time to come. There is expectation of phenomenal growth for the diagnostics industry. Being a leading exporter of IVDs to the global market, we are likely to enjoy a sizeable chunk of the global buyers seeking these test kits apart from our existing product lines.
Our cost-effective, society-conscious and ethical business dealings will further cement our reputation and relationship with our public.
- What have been the various learnings from a business perspective?
It is quite evident that change is the only constant. In December 2019, we would not have even imagined the current situation and global dynamics. Innovation and business foresight are extremely important for the survival of any business. While we have not been majorly impacted, we can see many industry counterparts struggling to maintain business continuity because of their over-dependence on China for raw materials. It is thus important to have a wide basket for sourcing raw material as well as distribution of finished products. A robust business continuity plan is a must to mitigate the negative impact of large-scale disruptions. Flexibility and adaptability must be incorporated in the business ethos.
But most importantly, while we may be a for-profit organisation, we have learnt the most critical aspect is humanity, compassion and social consciousness. The only reason mankind will win over this pandemic is because we all decided to keep humanity, compassion and social aspects on top of all ‘purely business’ considerations – and this is what will continue to endear us to our publics.
- Are you looking at any major policy shifts internally (within J Mitra) or externally (within industry)?
I believe so. The qualities that I have mentioned earlier have been always considered more adoptive in nature. It is increasingly becoming evident that they are very critical to a business process. Organisations will increasingly look at integrating these in their work-culture.
The learnings will trigger various changes that will make us more self-reliant and robust in business operations, looking at business continuity and sustainability of operations in the after-math of any global calamity.
Also, India is one of the biggest markets for healthcare services consumption. Our population coupled with our industry capabilities is likely to ensure a more robust ‘make in India’ initiative in the years to come. Healthcare being a necessity and not a luxury, this segment is likely to grow at a much better tangent as compared to most of the other industry, and will not only drive the economic output for the healthcare industry along but for the overall Indian economy, especially from a global perspective.
- How would you place Indian Healthcare Industry vis-à-vis the global healthcare industry? A comparison between year 2019 and 2025?
India has been able to withstand the Corona onslaught. Quoting Hon’ble Prime Minister Modi – the lockdown looks costly from an economic perspective, but if we take into account the number of lives saved, this is but a minor cost (10 Apr, 2020).
According to the IMF, India will still remain the fastest growing economy in 2020, and that is a great morale booster. In terms of volume, India is the 3rd largest producer of pharmaceuticals and related products in the world, and a major exporter of generic drugs and devices to all parts of the world.
I see India taking a lead in times to come by adopting a very aggressive stance and fully exploiting the opportunity created by the distrust and sentiment against China. The Government and industry will work together and with great speed, to provide the best quality products and services to the global market at most cost-effective rates. I do see the Indian healthcare segment taking on a leadership role in the global market replacing China as the Numero Uno player.
- What is your message to the government – in terms of critical areas that they need to focus on, and address?
Various industry bodies, including AiMED have jointly approached the Finance Ministry (CBEC) to cut down import duty on raw materials and hike import duty on finished goods, which is the lowest in India amongst the BRIC countries. Just to cite an example, ELISA finished products (HS Code – 38220019 List 4 Sr. No. 32) have 0% duty and 5% IGST, whereas the raw material for ELISA kits under the same HS code attract 5-20% import duty plus 12% IGST – tilting the balance away from the home-grown manufacturers.
Various aspects critical for winning this race are – ensuring a cost advantage over China, faster government permissions and single-window clearances, ease of doing business, adequate financing, competent infrastructure and soft loans with longer repayments.
Other focus areas are – creation of large clusters with common infrastructure, facilities, subsidies for technological upgradations so that there is higher sustainability and economies of scale.
This is a long-standing concern of both the industry and the policy makers, but Governments have continued to drag their feet on the subject rather than take concrete result-driven, time-line specific actions
Speed is of great essence – if India has to succeed in capturing a significant portion of the market up for grabs, they have to display aggression and garner the first mover’s advantage. An opportunity like this is not likely to surface for a long, long time.