Relevance: GS-3: Indian Economy, mobilization of resources

Relevance: GS-2: Government policies and interventions for development in various sectors. Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources

Key phrases: Nutraceuticals, FSSAI, Herbal, nutrition, prevention healthcare, Janaushadhi Kendras.

Why in News?

• With the wellness market growing globally, Nutraceuticals offers a great opportunity for aspirants in the sector.

What are nutraceuticals?

• Nutraceuticals are foods, or parts of foods, which provide medical or health benefits, including prevention and treatment of disease i.e. nutrients with medical implications.
• Nutraceuticals, which are generally made from herbal/ botanical raw materials, are functional foods or food components that provide demonstrated physiological benefits or reduce the risk of chronic disease, above and beyond their basic nutritional functions.
• A functional food is similar to conventional food, while a Nutraceuticals is isolated from a food and sold in dosage form, in both cases the active components occur naturally in food.
• Nutraceuticals include products such as protein supplements, malt-based nutrition drinks, immunity booster bars among others for improving overall health and nutritional requirements of the people

Nutraceutical market in India:

• Currently, the USA, Japan, and Europe account for more than 90% of the total global nutraceutical market. But with these markets attaining maturity, the focus of nutraceutical players is shifting towards developing economies, especially those across Asia Pacific, including India. Indian market holds only a 2% market share of the global nutraceutical market and its estimated valuation stands at around US$4 billion as of 2017. Experts and reports suggested that it will grow to approximately USD 18 billion by 2025.
• The dietary supplements market in India is valued at USD 3924.44 million in 2020 and reports say that it will reach USD 10,198.57 million by 2026. It puts the industry at a 22 per cent growth rate year on year.
• This industry has risen in the past few years and recently a boost due to the ongoing pandemic. The focus on preventive healthcare has contributed to the growth of this sector.
• The population across India has begun to believe in immunity-boosting supplements and has led to a significant shift in buying patterns and market behavior. Vitamin capsules, chewable tablets and gummies are examples of the open-minded buying behavior of consumers of healthcare products. Vitamin and zinc supplements are also those commonly prescribed by doctors during the pandemic. Making a growth path for the nutraceuticals market in India.
• Preventive healthcare has become an important line of defense during the pandemic proving the nutraceuticals sector to be a strong economic partner to the people. Even after the intensity of the pandemic dropped, nutraceuticals continued to be preferred. The second wave too has seen that the nutraceutical sector has built and will continue to grow its presence in the market.

Challenges faces by Nutraceuticals industry in India:

• The lack of consistent regulation and standardization of Nutraceuticals product is one of the key challenges faced by nutraceuticals producers in India. Product cycle in the Nutraceuticals industry is regulated by strict guidelines through each phase of product development, from the selection of raw materials to the packaging stage. FSSAI (Food Safety and Standards Authority of India) issues regulations on licensing and registration of business, packing and labelling, food products standard, additives, etc.
• However, irregularities in laid guidelines for registration of nutraceuticals, permitted additives, and packaging often create problems for companies to get product approval quickly leading to costly delays.
• The most common concern that nutraceutical manufacturers face is the lack of clear differentiation between raw materials, additives, or colors categorized as permitted to use in a pharma drug or a nutraceutical product. What is more, some colors and additives commonly used in food do not find place in the list of permitted additives for nutraceuticals under the regulations.
• Similarly, any product packaged and marketed in the form of a gelatin capsule is considered as a drug and not necessarily a nutraceutical or dietary product, regardless of its function and indication.
• Another challenge for producers is to arrive at the right pricing for their products in the local market. Though the demand for nutraceuticals is expected to rise considerably, the high prices of nutraceuticals limit their adoption in the Indian market. Nutraceutical producers try to recover their R&D costs in a short span of time by putting a high price tag on their products, but in a price-sensitive market such as India, high costs associated with producing nutraceuticals (or putting high margins on products) is a major restraining factor. Also, affording health products, which cost much more than some of the basic food items, is a key concern for majority of Indian population.
• Moreover, with the introduction of GST (Goods & Services Tax) in July 2016, nutraceuticals and other health supplements are subject to 18% tax (with few categories even taxed at 28%), making these products considerably more expensive than before (when they were taxed at 12%). High taxes associated with nutraceutical products could also affect the entry of new players in the market as these new players would be pressed to launch their products at lower prices in order to get a slice of the market.

Way Forward:

• Nutraceuticals can play a vital role in eradicating malnutrition and paving a bridge between government efforts and the population.
• The current situation paints a brighter picture for the future where the Indian nutraceutical industry could help the global pharmaceutical industry grow.
• Special financial assistance or packages, HSN code structure, and tax breaks for analysis and experimentation during clinical studies. It will boost the industry and contribute positively to public health. The public-private partnership (PPP) model will also help drive growth and penetration of markets across the country to enhance nutrition among unprivileged segments of society.
• The nutraceuticals industry can be a saving grace for public health and expensive modern medicine.

Source: The Hindu

Mains Question:

Q. “As Nutraceuticals are a combination of medicine and nutrition, so it can play a vital role in eradicating malnutrition problem in India” Illustrate.