The move, facilitated by the Union commerce ministry, is expected to help them penetrate neighbouring Latin American markets. A commerce ministry official said a couple of Indian drug makers have also agreed, in principle, to set up manufacturing facilities in Hidalgo to make Mexico their production and logistics hub and cater to Latin American regions.
The Mexican pharmaceutical market, the second largest in Latin America after Brazil, was worth $10.6 billion last year. The country, considered one of the most developed drugs markets in the region, houses around 200 pharmaceutical companies, including some large multinationals.
“Mexico has stringent regulatory standards, superior to most of its Southern neighbours, and its pharmaceutical imports last year stood at $4.3 billion,” a commerce ministry official said.
India reported a 67.6% growth in drug exports to Mexico in the first five months of the ongoing fiscal year till August, to $92 million, from about $55 million in the same period last year, Ravi Uday Bhaskar, director general of the Pharmaceuticals Export Promotion Council of India (Pharmexcil) told ET. In the previous fiscal year, total exports to Mexico was about $160 million, he added.
Mexico, which suffered a shortage of medicines during the early days of the Covid-19 pandemic, is looking at cost saving measures and has identified Indian generic medicines as the best alternative to expensive, branded medicines and raw material that it currently imports from the United States and European markets such as Germany, France, Switzerland, Canada, Spain and Ireland.
“The Mexican government has a significant budget for public healthcare and the government procurement of medicines in 2019 stood at around $4.2 billion,” said Lakshmi Prasanna, regulatory affairs director at Pharmexcil.
The letters of intent offer Indian generic drug makers preferential status in the public procurement of medicines, apart from easier registration of drugs in Mexico and exports from there to other Latin American markets, the officials said. Some of the companies that signed the agreement with the Mexican state already have manufacturing facilities in Mexico, while others have marketing offices. About 21 Indian drug companies have established business operations in Mexico currently.