The complex, expensive and time-consuming chemical import regulation imposed by the European Union is likely to cause immense damage to the pharmaceutical and chemical exporters of India. The deadline of 30 November 2008 set by the EU to register on a new chemical substances’ regulatory regime – Registration, Evaluation and Authorization of Chemical Substances (REACH) has sent jitters among the Indian pharma and chemical exporters alike.
Under the new norm, all chemical substances manufactured in or imported into the EU must register with the European Chemicals Agency (ECHA), the agency under which REACH will function. Some international trade observers have opined that the new rule would be a pseudo-tariff inflicted on the exporters which could cost up to $1.5 million. According to Indian Chemical Council, pharmaceutical exports to the EU amount to more than 35 per cent of the total EU’s global imports. Depending upon the quantity exported, the registration process may take up to even two years to complete. The registration process will be open from June and that will give the exporters a meager five months to continue with trade.
Small and medium businesses that mostly supplies intermediates or raw chemicals will be the worst affected, since the big players have already moved on to a different level in the drug supply chain. In a workshop conducted by the Pharmaceuticals Export Promotion Council of India on REACH, noticed that many exporters were not even aware of such a requirement. During the event, two important issues have emerged, one is, no one knows what REACH’s requirements are and the other being, the concern about the ‘confidentiality’ of the technical data shared with ECHA through an EU representative. Nevertheless, the government officials have agreed, the issue will be taken up in trade negotiations with the EU in the near future.