Why Pharmaceutical Exports from India to Europe Grew During Economic Crisis?

Abstract

This article looks into the export trends of pharmaceuticals from India to selected destinations in Europe during the time period 2005–2014. Ten countries of Europe have been selected and divided into two groups—those that are more affected by the crisis beginning in 2008, and those that are less affected. The first group maintained a negative growth rate of GDP more consistently than the second group during the period of study. We found that India’s pharmaceutical exports to European countries, which are relatively more affected by economic crisis, in the time period of study, have increased despite falling income and falling per capita pharmaceutical expenditure. This article investigates the reasons for such trends in exports. Health care and pharmaceutical expenditures in the selected European destinations are largely publicly provided and have been subject to cost-containment policies. The austerity measures in Europe, as they were carried out in health care provision, India’s cost advantage in pharmaceuticals and its advantage as a generic producer and exporter are likely positive contributors to this growth.