Indian Pharma CDMOs Unaffected by US Tariff Proposals

Despite the looming threat of new US tariffs ranging from 10-25%, Indian pharmaceutical companies, especially those in the contract development and manufacturing organizations (CDMOs) sector, remain resilient. A recent report by B&K Securities highlights that these companies are expected to continue leveraging global trends without major disruptions.

India's Crucial Role in the US Generic Drug Supply Chain

India plays a pivotal role in the US generic drug supply chain, supplying essential key starting materials (KSMs), active pharmaceutical ingredients (APIs), and finished formulations. Indian firms are responsible for approximately 40-45% of the generic drug volume in the US market. This significant contribution underscores the importance of Indian CDMOs in the global pharmaceutical landscape.

Future Outlook for Indian CDMOs

With the increasing trend of global pharmaceutical companies outsourcing production to Indian CDMOs as part of a China+1 diversification strategy, the sector is poised for further growth. Factors such as a favorable USD/INR exchange rate and an uptick in requests for quotations (RFQs) are contributing to this optimistic outlook. Moreover, Indian CDMOs are investing heavily in expanding their capabilities in specialized fields, positioning them to tap into the burgeoning $180 billion global CDMO market.