tiểu luận group assignment report 1 import pharmaceuticals fromindia

Although two-thirds ofthe Indian workforce still live directly or indirectly from agriculture, services are agrowing sector and are playing an increasingly important role in the Indian e

THE UNIVERSITY OF DANANGUNIVERSITY OF ECONOMICS

GROUP ASSIGNMENT REPORT 1

IMPORT PHARMACEUTICALS FROMINDIA

Phan Thị Huơng TrâmNguyễn Thị Kim NgânĐoàn Nguyên Minh TâmLê Thị Bảo Ngọc

Da Nang, March 5 , 2023

TABLE OF CONTENT

PART 1.SEARCHING FOR BUSSINESS OPPORTUNITIES 4

1 General Introduction 4

2 Overview of the Indian economy 4

3 Analysis of strong economic fields of India 5

3.1 Petroleum 6

3.2 Engineering 7

3.3 Jewelry 7

3.4 Pharmaceuticals 8

3.5 Iron and steel 9

4 Evaluate companies in the industry and select potential cooperation company 104.1 Sun Pharmaceutical Industries Ltd 10

4.2 Divi's laboratories limited 11

4.3 Dr Reddy's Laboratories 12

4.4 Cipla Limited 13

4.5 Emcure Pharmaceuticals 14

5 Introduction about potential partner 17

6 Introduction about product 18

6.1 Types of API 18

6.2 API’s market Dynamics 18

PART 2.LEARN ABOUT AND ANALYZE THE CONTRACT 21

7 Contract analysis and contract structure 21

7.1 Heading 21

7.2 Content of the contract 21

7.3 The last part of the contract 24

8 Conflict of interest and Solution 24

8.1 Price 24

8.2 Delivery time: 25

8.3 Payment terms 26

8.4 Conditions of carriage 26

8.5 Guarantee 27

REFERENCE 29

TABLE OF FIGURTable 1 - Compare companies in India pharmaceuticals industry 10

Table 2 - Compare API manufacturing between companies 17

YFigure 1 - List of product exported by India in 2021 6

Figure 2 - Sun Pharmaceutical Industries Ltd 11

Figure 3 - Divi's laboratories limited 12

Figure 4 - Dr Reddy's Laboratories 13

Figure 5 - Cipla Limited 13

Figure 6 - Emcure Pharmaceuticals 14

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PART 1.SEARCHING FOR BUSSINESS OPPORTUNITIES

1.General Introduction

India, officially the Republic of India is a country in South Asia It is the largest country by area, the second-most populous country, and the most populousdemocracy in the world Bounded by the Indian Ocean on the south, the Arabian Seaon the southwest, and the Bay of Bengal on the southeast, it shares land borders withPakistan to the west; China, Nepal, and Bhutan to the north; and Bangladesh andMyanmar to the east In the Indian Ocean, India is in the vicinity of Sri Lanka and theMaldives; its Andaman and Nicobar Islands share a maritime border with Thailand,Myanmar, and Indonesia India’s capital is New Delhi, built in the 20th century justsouth of the historic hub of Old Delhi to serve as India’s administrative center NewDelhi is the capital city, but Mumbai is the largest city Hindi is the official languageand English is a second official language English has great importance there as acommon language.

seventh-2.Overview of the Indian economy

It is the world's fifth-largest economy by nominal GDP and the third-largest bypurchasing power parity (PPP) According to the International Monetary Fund (IMF),on a per capita income basis, India ranked 142nd by GDP (nominal) and 125th byGDP (PPP)

The end of the Cold War and an acute balance of payments crisis in 1991 led tothe adoption of a broad economic liberalization in India.The economy of India hastransitioned from a mixed planned economy to a mixed middle-income developingsocial market economy with notable state participation in strategic sectors.

Since the start of the 21st century, annual average GDP growth has been 6% to7% The economy of the Indian subcontinent was the largest in the world for most ofrecorded history up until the onset of colonialism in the early 19th century Indiaaccounted for 7.2% of the global economy in 2022 in PPP terms, and around 3.4% innominal terms in 2022.

Nearly 70% of India's GDP is driven by domestic consumption The countryremains the world's sixth-largest consumer market Apart from private consumption,India's GDP is also fueled by government spending, investments, and exports

India was the world's 14th-largest importer and the 18th-largest exporter (2020).India has been a member of the World Trade Organization since 1 January 1995 Itranks 63rd on the Ease of doing business index and 68th on the GlobalCompetitiveness Report Due to extreme rupee/dollar rate fluctuations India's nominalGDP too fluctuates significantly With 476 million workers, the Indian labor force is

the world's second-largest India has one of the world's highest number of billionairesand extreme income inequality Because of several exemptions, barely 2% of Indianspay income taxes.

In 2021–22, the foreign direct investment (FDI) in India was $82 billion Theleading sectors for FDI inflows were the service sector, the computer industry, and thetelecom industry.

India is the world's sixth-largest manufacturer, representing 2.6% of globalmanufacturing output Nearly 65% of India's population is rural, and contributes about50% of India's GDP It has the world's fifth-largest foreign-exchange reserves worth$561 billion India has a high public debt with 83% of GDP, while its fiscal deficitstood at 6.4% of GDP India faces high unemployment, rising income inequality, and adrop in aggregate demand India's gross domestic savings rate stood at 29.3% of GDPin 2022.

The Indian economy is diverse and includes the following sectors: agriculture,handicrafts, textiles, manufacturing and many service sectors Although two-thirds ofthe Indian workforce still live directly or indirectly from agriculture, services are agrowing sector and are playing an increasingly important role in the Indian economy.

The move to a digital age and a large number of young and educated, fluentEnglish-speaking populations are gradually turning India into an important destinationfor the back office services of the global companies when they outsource (outsourcingpart or all of the work to other countries) their customer services and technical support.India is a major exporter of skilled workers in software and financial services andsoftware engineering Other sectors such as manufacturing, pharmaceuticals,biotechnology, nanotechnology, telecommunications, shipbuilding and aviation areshowing strong potential and are seeing higher and higher growth rates.

3.Analysis of strong economic fields of India

The Indian economy is diverse and includes the following sectors: agriculture,handicrafts, textiles, manufacturing and many service sectors

The services sector has the largest share of India's GDP, accounting for 57% in2012, up from 15% in 1950 It is the seventh-largest services sector by nominal GDP,and third largest when purchasing power is taken into account The services sectorprovides employment to 27% of the workforce

Although two-thirds of the Indian workforce still live directly or indirectly fromagriculture, services are a growing sector and are playing an increasingly importantrole in the Indian economy.

The move to a digital age and a large number of young and educated, fluentEnglish-speaking populations are gradually turning India into an important destinationfor the back office services of the global companies when they outsource (outsourcingpart or all of the work to other countries) their customer services and technical support.India is a major exporter of skilled workers in software and financial services andsoftware engineering.

It can be said that the service industry in India is known to the world and hasbecome an industry that contributes a large part to the overall growth of the Indianeconomy However, we will focus more on tangible export products instead of serviceproducts

Figure 1 - List of product exported by India in 2021

India has come up as a large exporting nation in recent decades, which hasfacilitated the Indian economy to new heights The number of commodities exportedfrom India has significantly improved, and the market is now wider than ever Manyforeign markets are heavily dependent on India for importing certain goods to theircountries India's top export products contain petroleum products, engineering, jewelry, pharmaceuticals, iron and steel, cereals, textile products, etc.

3.1 Petroleum

As one of the high-demand products for export, petroleum is the key item for thefuel and energy requirements of the world After China, India is the second-largestrefiner in Asia Petrol, diesel, gasoline, jet fuel, and LPG markets are very demandingin countries like the US, China, and the Netherlands

India has an even more central role in the global oil map, because of the long Russia-Ukraine war India's important role is expected to increase following newEuropean Union (EU) sanctions on Russian exports of oil products Due to the ban, alarge amount of diesel will leave the market, while more consumers, especially inEurope, will buy oil from Asia to fill the supply gap Because of the increasingdemand, India's export of these products is also significantly increasing

year-Exporting petroleum products has helped the country a lot, yet India is heavilydependent on oil imports for its economy This country depends on imports to meetabout 85% of its crude oil needs, which is why the trade balance is in deficit.

The huge reliance on imports of crude oil and natural gas to meet domesticdemand and the high volatility of crude oil prices are expected to drive up the price ofIndian petroleum products

Petroleum products are a potential product of India at the moment, but only in thecase of Western countries Vietnam is still maintaining a neutral attitude towards theparties Moreover, Vietnam is not a country too dependent on external oil supplies.Therefore, this is not a potential import product for Vietnam at the moment.

3.2 Engineering

The engineering sector is the largest of the industrial sectors in India It accountsfor 27% of the total factories in the industrial sector and represents 63% of the overallforeign collaborations Demand for engineering sector services is being driven bycapacity expansion in industries like infrastructure, electricity, mining, oil and gas,refinery, steel, automobiles, and consumer durables India has a competitive advantagein terms of manufacturing costs, market knowledge, technology, and innovation invarious engineering sub-sectors India’s engineering sector has witnessed a remarkablegrowth over the last few years, driven by increased investment in infrastructure andindustrial production The engineering sector, being closely associated with themanufacturing and infrastructure sectors, is of huge strategic importance to India’seconomy.

In FY22, India exported engineering goods worth US$ 111.63 billion, a 45.51%increase YoY India exports engineering goods mostly to US and Europe, whichaccount for over 60% of the total exports.

3.3 Jewelry

The term 'jewelry' here contains gold, gemstones and similar materials Due to itsnatural wealth in gold, diamonds, pearls, gemstones, and other forms of jewelry, Indiaconsumes around 20 percent of the global gold production and 75 percent of thatamount goes into making jewelry And because of that, India owns almost 6% ofshares in global exports

The gems and jewellery industry of India contributes 7% to India’s GrossDomestic Product (GDP) The industry employs more than 5 million of skilled andsemi-skilled workforce in the country The sector contributes about 10-12% of India’stotal merchandise exports, accounting for the third largest commodity share During2021-22, the gems and jewellery exports played an instrumental role in growingIndia’s overall exports to US$ 419 billion with a growth of 44% from 2020-21 and34% from 2019-20.

Western Region is key exporting hub for the gems and jewellery industrycontributing almost 77% of the total exports in 2021-22 Surat, a city of Gujarat statein the western region of India has more than 450 organised jewellery manufacturers,importers & exporters, making it the jewellery manufacturing hub of the world.

As per 2020 statistics, India’s gems and jewellery exports account for about 3.5%of the world’s total exports, making it the seventh highest exporter in the globe Thecountry is ranked first in diamonds jewellery, silver jewellery and lab grown diamonds& Synthetic stones with 29.0%, 22.0% and 32.7% share of the total world’s exportsrespectively The overall gross exports of gems & jewellery stood at US$ 20.58 billionin FY23 (until September 2022) The overall gross exports of cut & polished diamondsstood at US$ 12.22 billion in FY23 (until September 2022)

In the list of products exported from India, cut and polished diamonds are themost exported items Indian states such as Gujarat, Andhra Pradesh, and MadhyaPradesh are the primary locations where gold and diamonds are extracted

These jewelry items are sent to Gujarat for polishing and cutting, followed byexporting to countries such as the US, UAE, UK, and Hong Kong.

3.4 Pharmaceuticals

India is the largest provider of generic drugs globally and is known for itsaffordable vaccines and generic medications The Indian Pharmaceutical industry iscurrently ranked third in pharmaceutical production by volume after evolving overtime into a thriving industry growing at a CAGR of 9.43% since the past nine years

India has the most number of pharmaceutical manufacturing facilities that are incompliance with the US Food and Drug Administration (USFDA) and has 500 APIproducers that make for around 8% of the worldwide API market.

Indian pharmaceutical sector supplies over 50% of global demand for variousvaccines, 40% of generic demand in the US and 25% of all medicine in the UK Thedomestic pharmaceutical industry includes a network of 3,000 drug companies and~10,500 manufacturing units India enjoys an important position in the globalpharmaceuticals sector.

The country also has a large pool of scientists and engineers with a potential tosteer the industry ahead to greater heights Presently, over 80% of the antiretroviraldrugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) aresupplied by Indian pharmaceutical firms India is rightfully known as the "pharmacy ofthe world" due to the low cost and high quality of its medicines.

Being a research-based industry, the pharmaceuticals sector in India has seenhuge growth over the past few decades.

3.5 Iron and steel

As of April 2022, India was the world's second-largest producer of crude steel,with an output of 10.14 MT The growth in the Indian steel sector has been driven bythe domestic availability of raw materials such as iron ore and cost-effective labour.Consequently, the steel sector has been a major contributor to India's manufacturingoutput.

The Indian steel industry is modern, with state-of-the-art steel mills It has alwaysstrived for continuous modernisation of older plants and up-gradation to higher energyefficiency levels.

In the past 10–12 years, India's steel sector has expanded significantly.Production has increased by 75% since 2008, while domestic steel demand hasincreased by almost 80% The capacity for producing steel has grown concurrently,and the rise has been largely organic.

In general, the above fields are all areas of strength of India For jewelryproducts, although exports ranked second, the trade balance and growth rate in recentyears have been negative This may indicate that the development trend of the itemseems to be slowing down Besides, in the context of the complicated economicsituation, the price of this item is often fluctuating, the consumption trend is down, theimport of this item may not be very suitable Similarly, the engineering industry alsohas a negative trade balance, looking at the trade data of India and Vietnam can alsosee that Vietnam is also very potential in producing this item, even exporting more toIndia Thus, this product for the Vietnamese market can also be considered as apotential product, but it is not a special product Let's take a look at two industries, ironand steel and pharmaceuticals It can be seen that these two items have a positive trade

balance and have a relatively good growth rate However, looking at the data, it can beseen that the pharmaceutical item is progressing more favorably Besides, in thecontext of the Covid pandemic still developing new categories, the pharmaceuticalindustry is a very important industry In order to ensure that the economy is stillfunctioning well, booster vaccination for people is very important even though theepidemic situation is now better than before In addition, the shortage of drugs athospitals has disrupted medical examination and treatment, seriously affectingpatients, due to legal issues Currently, the Government is still active in resolvingissues related to the legal corridor in the procurement of pharmaceuticals and medicalequipment Therefore, at present, pharmaceuticals are an important issue in theVietnamese market, and trading business with India in this industry is very promisingin the future.

4.Evaluate companies in the industry and select potential cooperationcompany

Company Name Sun Pharmaceutical Industries

Divi's Laboratories

Dr Reddy's Laboratories

Cipla Limited

Emcure Pharmaceuticals

Headquarters Goregaon,

Mumbai Hyderabad Hyderabad Mumbai Pune

Valuation $26.2 Billion

$12.6 Billion

$9.1 Billion

$9.8 Billion

$0.63 Billion

Logo

$4.7 billion

$780 million

$2.4 billion

$2.5 billion

$870.25 million

Table 1 - Compare companies in India pharmaceuticals industry

4.1.Sun Pharmaceutical Industries Ltd

Figure 2 - Sun Pharmaceutical Industries Ltd

It produces and sale of chronic and acute therapies which include, API (Activepharmaceutical ingredients), ARVs (antiretroviral), OTC (over the counter), andgeneric drugs in India and in the United States Every year they sell 30 billion doses oftherapeutic segments covering neuropsychiatry, cardiology, neurology,gastroenterology, diabetology, respiratory, anti-infective, oncology, and many more Itis the first largest pharmaceutical company in India and the fourth-largest genericpharmaceutical company in the world In 2014, sun pharmaceutical procured Ranbaxy,making it the largest pharma company in India and the US They have more than 40manufacturing API and formulation plants in more than 100 countries across theworld They provide more than 2000 formulations in India and other countries.

4.2.Divi's laboratories limited

Figure 3 - Divi's laboratories limited

Divi's laboratories is an Indian pharmaceutical multinational company thatmanufactures API, intermediates, and nutraceutical ingredients In marketcapitalization, it is India's second valuable pharma company The company has threemanufacturing units in Hyderabad, Vishakhapatnam, and Kakinada and three researchand development units in India It is one of the tenderest firms, which made the top listin leading pharma companies The countries where divi's laboratory exports productsare Japan, the USA, Australia, South Africa, and the Philippines The divi'slaboratories are holding divi's laboratories (USA), Inc and Divi's Laboratories EuropeAG.

4.3.Dr Reddy's Laboratories

Figure 4 - Dr Reddy's Laboratories

It is known for manufacturing a wide range of pharmaceuticals in India andoverseas They have over 190 medications, 60 active pharmaceutical ingredients fordrug manufacturers, diagnostics kits, critical care, and biotechnology products Thenotable products of Dr Reddy's include Canagliflozin Ramipril, Ibuprofen, Naproxen,Atorvastatin, Nizatidine, Naproxen Sodium, etc.

4.4.Cipla Limited

Figure 5 - Cipla Limited

It is India's fourth-largest pharma company based on overall revenue Thispharmaceutical company in India focuses on developing medicines to treat respiratory,cardiovascular diseases, arthritis, diabetes, weight control, depression, and many more.The subsidiaries of Cipla are Invagen Pharmaceuticals They are the largestmanufacturer of antiretroviral drugs.

4.5.Emcure Pharmaceuticals

Figure 6 - Emcure Pharmaceuticals

Emcure Pharmaceuticals started as a single manufacturing facility in Pune andhas witnessed healthy growth throughout the years, now boasting a range of world-class manufacturing facilities spread across API, formulations, and biotechnology.Emcure is now known as a vertically integrated pharmaceutical company withcommendable infrastructure, skills, and resources that are not only comparable to thebest pharma companies in Mumbai, India but those that are considered as the best inthe world Manufacturing of APIs, Formulations, and Biotechnology can all besummed up as strengths of Emcure.

=> Selecting potential partner:

Comparing and evaluating a few large pharmaceutical companies in India, wefound that each of them has their own strengths and all manufacture and distributepharmaceutical products on a multinational scale In which, Sun PharmaceuticalIndustries leads other enterprises in annual revenue and worldwide operation, with anumber of factories that are also much higher than the rest Cipla has a much longerhistory than the others, but its strength is in the production of antiretroviral drugs Dr.