No tariffs on Indian pharma; plays vital role in supplying affordable medicines to US

New Delhi, Apr 3 (PTI) The Trump administration has exempted the Indian pharma sector from reciprocal tariffs, recognising the vital role played by the domestic industry in supplying affordable medicines across the globe, including the US, according to industry players.

President Donald Trump, in a historic measure to counter higher duties on American products imposed globally, on Wednesday announced reciprocal tariffs on about 60 countries.

He announced 27 per cent reciprocal tariffs on India, saying New Delhi imposes high import duties on American goods.

However, pharmaceuticals and other essential items are exempted from the increased import duty.

The decision underscores the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security, Indian Pharmaceutical Alliance (IPA) Secretary General Sudarshan Jain said in a statement.

India and the US share a strong and growing bilateral trade relationship, with a shared vision to double trade to USD 500 billion under the Mission 500 initiative, he added.

Pharmaceuticals remain a cornerstone of this partnership, as India plays a vital role in global and US healthcare by ensuring a steady supply of affordable medicines, he noted.

The Indian pharmaceutical industry is committed to advancing the shared priorities of both nations: strengthening medicine supply chain resilience and reinforcing national security by ensuring access to affordable medicines for all, Jain noted.

IPA is a network of top 23 Indian pharma companies, including Sun Pharma, Dr Reddy’s Laboratories, Lupin, Torrent and Glenmark.

Indian pharmaceutical companies supply a substantial proportion of drugs to US residents, with four out of ten of all prescriptions filled in the US in 2022 being supplied by Indian companies.

As per industry sources, medicines from Indian companies provided USD 219 billion in savings to the US healthcare system in 2022 and a total of USD 1.3 trillion between 2013 and 2022.

Generics from Indian companies are expected to generate an additional USD 1.3 trillion in savings over the next five years.

Pharmexcil Vice-Chairman Bhavin Mukund Mehta said the pharmaceutical sector has emerged as the clear winner.

“With India importing USD 800 million worth of pharmaceutical products from the US and exporting USD 8.7 billion, the strong trade ties between the two countries create a powerful win-win scenario.

“This shift drives significant cost savings on life-saving medicines and also positions Indian exporters to gain a competitive edge over their Asian counterparts, further strengthening India’s leadership in the global pharmaceutical market,” he added.

Mankind Pharma Promoter and CEO Sheetal Arora said President Trump’s decision to exempt pharmaceuticals from tariffs is not just a tactical move but a recognition of critical healthcare dependencies.

The US healthcare system relies heavily on India’s robust generic manufacturing and China’s API production, creating a supply chain that, if disrupted, would have immediate and severe consequences for patient care, he noted.

Building domestic manufacturing capacity to meet these needs will take years of investment, regulatory adjustments, and workforce development, Arora said.

He noted that for India, the exemption presents a strategic opportunity to reshape its pharmaceutical sector.

“By focusing on next-generation generics, accelerating biosimilar development, and expanding domestic API production, India can reduce geopolitical vulnerabilities while strengthening its position as the world’s pharmacy,” he added.

The pharmaceutical sector, India’s largest industrial export, was estimated at USD 12.72 billion in 2024.

Shardul Amarchand Mangaldas & Co Partner Arvind Sharma said that while pharmaceuticals are currently exempt from tariffs imposed by USA, potential future scrutiny under Section 232 could pose significant challenges for the sector.

“Since Section 232 primarily addresses national security concerns, pharmaceutical imports may be evaluated not just economically, but strategically,” he stated.

Section 232 of the Trade Expansion Act of 1962 enables the Government of USA, more particularly the President of USA, to take necessary action to restrict the import of items/articles that are deemed to threaten or impair the national security of the country.

Medical Technology Association of India Chairman Pavan Choudary said the decision safeguards the continuing flow of affordable, high-quality medicines to the US, reinforcing the strong healthcare partnership between the countries.