Industry sources claim that while the commerce ministry has been offering various incentives to boost exports, the health ministry's directive has undone the entire effort. "While we face the threat of mass cancellation of export orders and a loss of face in the international market, the ministry must realise that the country is also losing valuable foreign exchange. Moreover, in case of default we face the additional risk of claims for damages," an senior industry official said.

The domestic industry says that the health ministry's decision has no legal sanctity and adds that an absence of aspecific provision on such exports in the Drugs & Cosmetics Act can in no way merit the enforcement of a `ban.' "There has been no problem with such exports for the past 20 years. The ministry's sudden volte face comes as a shock to the industry. The entire move smacks of strong multinational pressure," another official pointed out.

Ironically, the ministry of health does not seem to have any problem with the importation of unapproved new drugs, but has taken a tough stand on even subsequent export orders of products earlier approved by the Drugs Controller General of India (DCGI), sources added.

In the present circumstances, new drugs like pantoprazole (an anti-ulcerant), carvedilol (a cardiovascular drug), celecoxib (for arthritis), trovafloxacin (an anti-bacterial) and atervastatin and travastatin (both cholestrol reducers) cannot leave Indian shores.

The domestic drug industry adds that when their international customers (in advanced European and American markets) do not have any problem with suchexports, the health ministry's diktat was unwarranted. Interestingly, even the American drug laws permit the export of unapproved drugs.

Ball in law ministry's court, say DCGI officials

Officials at the office of the Drugs Controller General of India (DCGI) say that there is no ban on the export of new drug molecules but that the absence of a provision in the Drugs & Cosmetics Act had prompted them to refer the matter to the law ministry for a correct interpretation. "We are awaiting the law ministry's verdict. If it says that the current act needs an amendment, we will abide," an official said.

Officials also questioned the logic of domestic drug firms securing firm export orders for such drugs before receiving a proper no objection certificate (NOC) from the DCGI.

Moreover, they said that they were also unsure if these drug firms resorted to sale of such products in the domestic market as well and added that the DCGI was cautious after the Supreme Court ruling disallowing the sale of certainanalgin combinations.

Besides, the increased domestic interest in exporting sildenafil citrate (that goes into Pfizer's anti-impotence drug Viagra) had forced them to review the interpretation of these laws.