Export market for Indian Pharmaceutical companies has been witnessing decline in recent months, despite of increasing capability of Indian players to produce cost-effective drugs. Which of the following may be the reason(s) for the same?

  1. Appreciation of US Dollar against Indian Rupee
  2. Weaker currencies in key markets such as Africa and Middle-East.
  3. Tighter scrutiny of Indian manufacturing sites by US Food and Drug Administration(FDA)

Select the correct option from the codes given below:

Answer: [B] Only 2 & 3

First statement is incorrect because appreciation of US Dollar against Indian Rupee will weaken Indian currency and make export more profitable for Indians, and hence, will increase the Indian export market. Second statement is correct because weaker currencies in Africa and Middle-East have worsened the pain for stocks in the countries, as their purchasing power reduced. Please note that Indian pharmaceutical industry has very good market capitalization in Asia, Africa, Middle East and Eastern Bloc countries. Third statement is correct because in recent month’s tighter scrutiny of Indian manufacturing sites by US Food and Drug Administration (FDA) has reduced the easy access of Indian pharmaceutical industry. Further, as per recent reports Indian pharmaceutical exports over the next four years will decline, and the annual growth rate in pharmaceutical exports may almost halve to 7.98% by 2020 from 14.77% CAGR during 2010-2014.

This question is a part of GKToday's Integrated IAS General Studies Module