Institutional Reforms and Export Efficiency of Indian Pharmaceutical Industry - A Comparative Analysis of Transitory-TRIPS and Post-TRIPS Periods

The impact of institutional reforms on the performance of various industries in many emerging economies had been a growing area of research in the recent times. In this context, we investigate the influence of institutional reforms on the export efficiency of Indian pharmaceutical industry after India became a signatory to the provisions of World Trade Organisation (WTO) from 1st January, 1995. India had been given a transition period of 10 years till 31st December, 2004 to fully comply with Trade Related Intellectual Property Rights (TRIPS) as per the provisions of WTO agreement. Accordingly, India has completely transitioned to a product-patent regime from a process-patent regime effective from 1st January, 2005. Many researchers and industry professionals of the Indian pharmaceutical industry postulated that the institutional reforms would have a negative effect on the growth prospects of the industry. Contrary to the predictions, Indian pharmaceutical industry has capitalized on the export opportunities in various developed and emerging economies in the world. In this backdrop, we measure the export efficiency of Indian pharmaceutical industry during transitory-TRIPS (1995-2004) and post-TRIPS (2005-2014) periods using data envelopment analysis (DEA). The analysis of our research indicates that the export efficiency of the Indian pharmaceutical industry was higher in the post-TRIPS period.