Industry sources indicate that bulk drugs like nifedipine, fluconazole, flutamide, mitoxantrone and acyclovir which are being cost-effectively manufactured by more than one domestic player in India, have been knocked off this list. The move, in effect, means that such drugs would now attract the regular customs duties as against zero duty charged on such imports under the earlier regime.

Significantly, finance minister Yashwant Sinha had announced the scrapping of the zero duty regime, since "the domestic industry generally merits some minimal protection". The budget has, to begin with, proposed the imposition of five per cent duty for some of these commodities, though this category has been exempt from the existing four per cent special additional duty.

Though the details of the new list oflife-saving drugs could not be ascertained, a host of domestic manufacturers like Cadila, Alembic Chemicals, Cipla, Vorin Laboratories, J B Chemicals, Unichem Laboratories, Dabur, TDPL etc are expected to benefit from the apparent "level playing field" emerging from this shift.

The domestic industry had, all along, being paying significantly higher duties in the case of life-saving drugs as compared with the imported versions of these products. "While local manufacturers faced the then normal excise levy of 18 per cent, besides over 40 per cent duty on the intermediate which is usually imported, direct imports of bulk like acyclovir, timolol maleate, fluconazole, mitoxantrone etc. were being allowed virtually duty free (except for the countervailing duty component). The pruning of this list is, thus, a welcome move," an official of a domestic drug firm said.

Sources, however, add that given the plethora of domestic players already involved in manufacturing drugs like nifedipine, fluconazole etc,competition is already high. "We have over 10 local manufacturers of fluconazole in the country. So, removing the drug from the life-saving drugs category is merely a small breather. This should have been done long ago," another domestic manufacturer of fluconazole added.

The domestic industry had also been seeking the removal of concessional duty benefits for a clutch of products like cefotaxime, vinblastine, ceftaxidime etc. "Take the case of ceftriaxone. There are atleast four well-established manufacturers in India including Orchid and Ranbaxy. So why allow any other player to import ceftriaxone at a concessional rate of duty? More so, when the drug commands a price of around Rs 22,000 per kg," a manufacturer claimed. Total domestic consumption of bulk ceftriaxone in the country is estimated to be 24 MT -30 MT per annum.