Complete Export Ban on Hydroxychloroquine

Why in News

India has banned all exports of hydroxychloroquine - an anti- malaria drug that is being used in the treatment of Covid-19.

  • This implies that the exceptions (export obligation and humanitarian grounds) mentioned in the previous order have come to an end.
  • The Directorate-General of Foreign Trade (DGFT) had prohibited the export of the drug on 25th March, 2020. But it left the option of export open to fulfil “export obligation” and on “humanitarian grounds”.
  • The Directorate General of Foreign Trade (DGFT) organisation is an attached office of the Ministry of Commerce and Industry. This Directorate, with headquarters at New Delhi, is responsible for formulating and implementing the Foreign Trade Policy with the main objective of promoting India’s exports.

Key Points

  • The export of hydroxychloroquine and formulations made from hydroxychloroquine is not even allowed from Special Economic Zones/ Export -Oriented Units (SEZs/EOUs) or against Advance Authorisation (AA) or against full advance payment.
    • SEZs are treated as foreign territory in terms of customs laws. Normally, export ban or restrictions imposed by the government does not apply on these zones as well as EOUs, which are specially meant to promote outbound shipments from the country.
    • Under the Advance Authorisation (AA) scheme, firms are allowed to import raw material at zero duty but with the condition of export obligation within a certified time frame.
  • Reasons
    • India has banned exports of a host of medical devices, including sanitiser, all types of ventilators and surgical masks.
    • The Indian Council of Medical Research (ICMR) has recommended the use of hydroxychloroquine for treating healthcare workers handling suspected or confirmed coronavirus cases and also the asymptomatic household contacts (showing no symptoms) of the lab-confirmed cases. It needs to be noted that the drug is yet to be proven as a cure for the novel coronavirus.
    • All this has been done to deal with the number of rising cases in the country.
  • USA’s Request
    • India is considering the request by the USA to release the ordered amount of hydroxychloroquine drug.
      • USA has been using the drug along with a combination of other drugs to treat COVID-19 patients. It is being said that the drug is yielding positive results.
    • This can be viewed as an opportunity for India’s pharmaceutical industry to gain access to the USA markets, but a call should be taken only after considering domestic requirements.
    • This may provide India and the US with an opportunity to sort out issues related to India’s capping of prices of drugs and medical equipment like stents that have figured prominently in trade disputes between the two countries.
    • This can also be seen as India, despite a complete ban on exports, may give priority to the USA's request. This highlights the importance of India-US relationship.

Source: TH