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Panama throws up lucrative opportunity for Indian manufacturers of Covid-19 diagnostic kits
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Laxmi Yadav, Mumbai
March 19 , 2022
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The Central American country, Panama’s decision to make it mandatory for local businesses to carry out home tests to detect Covid-19 virus, has thrown up a lucrative opportunity for India as the country has one of the largest industries in this segment.
The Panamanian Ministry of Health has authorized some provisions in the strategy to fight Covid-19, including the possibility for companies and businesses to carry out home tests to detect the virus, which are already endorsed by the commemorative Gorgas Institute, an entity dedicated to Health Research and Disease Prevention in the country. The decree signed by President Laurentino Cortizo establishes that swab centres could be created to carry out this type of test. If the test is negative, people can continue, but if the result is positive, they must go to a public or private swab centre to perform an antigen or PCR test to confirm the diagnosis.
As India has one of the largest industries in this segment and Panama has great potential to become the pharmaceutical headquarters of Latin America. This is an opportunity for Indian medical and pharmaceutical industries to create a link with the Panamanian Private and Gubernatorial Institutes to distribute these home tests, said Uday Bhaskar, director general, Pharmaceuticals Export Promotion Council of India (Pharmexcil).
Member companies dealing with these test kits may take advantage of this opportunity and can connect with the Embassy of India in Panama for more details, said Bhaskar.
Pharmexcil in collaboration with the Indian Embassy in Panama had organized a virtual webinar and B2B during January 2022 which has gained traction among business stakeholders of Panama and created momentum for India’s pharma exports.
India, the largest provider of generic medicines globally, has exported pharmaceuticals worth US$ 13.66 million to Panama in FY 2019 as against US$ 13.88 million worth of drugs exported in FY 2018.
The export of Indian pharmaceutical products to Panama has gone up by 54.39 per cent from 2014 to 2018. The pharma export recorded US$ 8.99 million in FY 2014.
The Latin American country which aspires to become a pharmaceutical hub for the region is extremely dependent on imported pharmaceutical products. The imported drugs constitute 90 per cent of the country’s market while locally produced and distributed drugs account for just 8 per cent of the total domestic market. Labelled and processed products contribute merely 2 per cent to the local market.
As part of a plan to boost and reactivate the national economy of Panama after the Covid-19 pandemic, on August 31, 2020, President Laurentino Cortizo signed a new law to create the special regime called EMMA. The Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing (EMMA) establishes special rules for operation of multilateral firms providing the production services.
This regime is aimed at new companies that want to take advantage of the incentives, or for companies that are currently registered under the headquarters of multinational companies' regime, and who wish to expand their services within the same economic group under a new light manufacturing division. The companies will get a whole range of exemptions. In particular, the tax regime provides for the tax break up to 5 per cent for the next 5 years after company registration in the EMMA tax regime. The employees of organizations will be able to claim a 50 per cent bonus for working on holidays as well as a 25 per cent bonus for working overtime.
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