India's January 2014 trade data has brought some respite to the country's economic woes. Trade deficit has almost halved to US $9.92 bn in January 2014 as compared to that of US $18.87 bn in the same month last year. The fall is mainly on account of huge fall in the gold and silver imports, that declined by 77% YoY during the month. Imports of precious metals declined due to restriction on gold imports, which ministry plans to abolish going forward. Further, the deficit would have been much lower had the exports not grown at a moderate rate of 3.79% YoY in January 2014 as a result of global slowdown. The marginal rise in exports was largely due to fall in shipment of gems & jewellery, petroleum products and decline in crude prices. It may be noted that, low trade deficit would contain our already high current account deficit and improves the balance of payment.
Indian pharma stocks are trading mixed with Torrent Pharma and Panacea Biotech leading the pack of gainers whereas J B Chemicals and Aurobindo Pharma are among the major losers. As per a leading business daily, United States Food & Drug Administration (USFDA) has rejected the demand of Ranbaxy Laboratories for continuing exports from the banned facilities until remedial action is taken to resolve the lapses in the manufacturing practices. Ranbaxy's Managing Director had asked the visiting USFDA Commissioner to frame a policy to permit drug companies to pursue business in the US so as to generate revenues to carry out remedial measures. However the USFDA Commissioner, Margaret Hamburg turned down Ranbaxy's plea saying that while companies were engaged in talks for one-off lapses, persistent mistakes were taken very seriously. The USFDA has imposed export ban on three Indian units of Ranbaxy due to manufacturing malpractices and recently banned export of pharmaceutical ingredients from its Toansa facility in Punjab. Ranbaxy has also paid a settlement fine of $ 500 m last year after it pleaded guilty of falsifying data and distributing adulterated drugs in the US. Apart from Ranbaxy, drug companies such as Wockhardt, Strides Acrolab and RPG Life Sciences have been issued import alerts for violations last year. Reportedly, Indian drug companies accounted for half of the warning letters issued by USFDA in 2013. Ranbaxy's stock is currently trading down by 1.8%.