Globalization of Indian Pharmaceutical Industry

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Globalization of Indian Pharmaceutical Industry started in the early 1990s when the government opened its markets to foreign investments. Indian Pharmaceutical Industry's Globalization took place with the coming of the foreign companies in the sector.

Globalization means the dismantling of the trade barriers and the integration of the economies of the nations through trade in goods and services, corporate investments, and financial flow between nations. Globalization has increased the world over in recent years due to the rapid progress that has been made in the field of technology especially in communications and transport. The government of India opened its economy to foreign companies through changes in its economic policy in 1991 and this led to the Globalization of Indian Pharmaceutical Industry.

The various advantages of Globalization of Indian Pharmaceutical Industry are that it brought in huge amounts of foreign currency into the industry which in its turn helped to boost the Indian economy. With many foreign pharmaceutical companies entering the Indian Pharmaceutical Industry it increased the number of jobs that were available to the people of the country. The benefits of Globalization of Indian Pharmaceutical Industry are that the foreign pharmaceutical companies also brought in highly advanced technology into the industry and this improved the quality of medicines that were available to the people. Many Indian pharmaceutical companies took over international pharmaceutical companies such as Ranbaxy merged with Croslands, Wockhardt with Merind, and Nicholas Piramal with Sumitra Pharma. This helped the Indian pharmaceutical companies to grow and make even more profits.

The various disadvantages of Globalization of Indian Pharmaceutical Industry are that the competition increased in the Indian market between the foreign pharmaceutical companies and domestic companies. This reduced the profit levels of the Indian pharmaceutical companies as a result of which many had to close down such as Hindustan Ciba Geigy, Park Davis, Boehringer Mannheim, and Abbot. This has resulted in many people losing their jobs and in Mumbai's Thane region which is in Maharashtra more than 30,000 people lost their jobs between 1997- 1999. Further the disadvantages of Globalization of Indian Pharmaceutical Industry are that many foreign pharmaceutical companies are taking over the Indian pharmaceutical companies such as SKB merged with Sterling, Ciba Geigy merged with Sandoz, and Rhone Poulenc merged with Fashions. This has led to the fear that foreign pharmaceutical companies will take over the Indian Pharmaceutical Industry.

Globalization of Indian Pharmaceutical Industry has had some positive as well as some negative effects. The government of India must make sure that the Indian Pharmaceutical Industry's globalization proves beneficial for the country.

Last updated on 3/18/2011


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