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GSP withdrawal will have marginal impact on pharma

The termination of the Generalized System of Preferences (GSP) benefits by the US could have a relatively marginal impact on Indian pharmaceutical companies that export drugs to the US. Dinesh Dua, Chairman, Pharmexcil, commented on the fallout, “It does impact pharmaceuticals, but very marginally. In fact, if you see the price spread, ex-factory dispatch price versus warehousing price/distribution price in the US, it doesn’t impact more than 4-5 percent.”

GSP is a preferential duty-free access granted by developed nations to developing countries. India exports about 2,000 items, including pharmaceuticals, to US. While on an average, Indian exporters enjoy about 35-40% margins in US, the margins could rise as high as 60-65% for some cases due to low competition or market exclusivity.