TRADE COMPETITIVENESS OF INDIAN DRUGS AND PHARMACEUTICAL INDUSTRY: A PRE-AND POST-TRIPS EXAMINATION

Abstract

This study aims to analyze trends in the exports and imports of Indian drugs and the pharmaceutical industry during the pre- and post-TRIPS periods, and to identify various firm-specific variables that determine the export performance of Indian pharmaceutical firms. For this purpose, the study uses secondary data collected from the UN Comtrade and CMIE Prowess IQ database for the period from 1990 to 2020. The study finds evidence supporting the view that the TRIPS agreement has improved the export performance of Indian drugs and the pharmaceutical industry. It is also observed that Indian pharmaceutical imports have grown at a higher rate in the post-TRIPS period than in the pre-TRIPS period. As regards the balance of trade, this study finds that the industry has a steadily growing surplus balance of trade throughout the years. Econometric exercise using fixed effects regression model confirms that firm size, R and D intensity, imported raw material intensity, advertising and marketing intensity, capital intensity, firm age, and profitability have a statistically significant positive impact on export performance of firms operating in the pharmaceutical industry.