US Tariffs Loom Over Indian Pharma Sector

Ahead of potential reciprocal tariffs by the US, the Indian pharmaceutical industry is on edge. Companies are bracing for measures that could raise drug prices, disrupt supply chains, and hurt exporters, especially those reliant on the lucrative American market.

Impact on Domestic Pharma Companies

Domestic pharma companies could face significant challenges once the White House confirms the scope and extent of tariffs on drug imports. Analysts suggest that if tariffs are imposed, they might peak at 10% on Indian medicines imported to the US, softening the material impact.

US Reliance on Indian Generics

The US relies heavily on India for affordable generics, with domestic companies supplying three out of 10 prescriptions. With India’s $9 billion plus US export market at stake, margin compression and export slowdowns loom as key risks.

Industry Experts Weigh In

Industry experts warn that tariffs could increase drug prices for US consumers and trigger shortages. However, India’s competitive advantage—stemming from cost-efficient production and a high number of regulatory-approved manufacturing facilities—positions it well to withstand potential tariff impositions.

Global Pharma Import Market

The US pharma import market splits into high-value patented drugs, mostly from Europe, and lower-value generics, led by India, China, and Mexico, where India dominates.