Union Budget 2022-23: Competitive taxation is needed for neutraceuticals in line with pharma products
As we are preparing to fight the third wave of the COVID-19 pandemic and further strengthen the health of the nation, the Union Budget this year needs to focus on strengthening and substantially promoting preventive healthcare services.
Young India is highly focused on preventive care and overall well-being. Rising awareness has significantly added to the demand for dietary supplements and other nutraceutical products. An increasing number of people today are firm in their belief that improper diet results in an increase in the costs of medicines, and this will undoubtedly boost the demand for nutraceuticals. We urge the government to look at the socio-economic benefits that the nutraceutical sector offers and extend its support for the sector.
Three things, if rolled out immediately, will help in enhancing the nutritional index of the population and the same time, expand exports manifold.
PLI Scheme for nutraceutical sector
There is a need to focus on building a strong agri-supply chain, robust research, and development of infrastructure, and encourage innovation. This is where the PLI scheme can contribute monetarily and non-monetarily at all levels of research, technology, and manufacturing. The PLI scheme, if carefully crafted with an integrated approach, can significantly boost the agriculture sector too. The industry is happy to work with the government and develop a scheme jointly.
Once the government comes up with the eligibility criteria, including the size of the company, type of the products, and so on, the scheme should be rolled out quickly to take advantage of the growing demand. With initial learnings, it can then be taken forward to cover the entire supply chain, starting from the farms to formulations.
As compared to the pharma sector, nutraceutical products are taxed higher. We need to look at giving equal importance to the nutraceutical sector and bring more competitive taxations in line with the pharma products.
Currently, pharma products are taxed between 5 percent and 12 percent while Nutra products are taxed at 18 percent. The pandemic has proven that it is people’s behaviour and immunity that will determine the course of the pandemic. A report by Global Wellness Economy identified an upsurge in immunity-focused food consumption and supplement use due to COVID-19. For a healthy nation, it is important to promote nutraceutical products and pricing will play a crucial role in the consumption habits given the purchasing power of a larger population.
Including corporates under NMPB Scheme
The National Medicinal Plants Board (NMPB) along with Ayush and Herbal industry bodies are working towards promoting medicinal plant cultivation. Corporates and industry players should also be included as part of the scheme to encourage backward and vertical integration. This will also ensure higher cultivation by the industry players to facilitate clinical research.
India is home to nearly 2,000 medicinal plants. The country has made curcumin, ashwagandha, haldi milk, and many such medicinal hacks universally famous. The time is now. While we extend our teachings to the outside world, we should apply for more patents in the name of India.
The nutraceutical sector offers significant opportunities for India across the value chain from farms to formulations. The industry helps in strengthening the overall healthcare sector by preventing diseases and acting as a gatekeeper.
Today, the global nutraceutical market is worth more than $400 billion, with the United States capturing more than half the pie worth over $240 billion. China accounts for around 14 percent of the total and India has just a 2 percent share. India can easily overtake China if all the stakeholders work together with the government providing the necessary push.
The author is Founder President of the Association of Herbal and Nutraceuticals Manufacturers of India (AHNMI) and Executive Chairman-MD, OmniActive Health Technologies. Views expressed are personal.