The US government, under President Donald Trump, has announced plans to impose new tariffs on pharmaceutical imports, which could significantly impact India, the top supplier of generic drugs to the US. The move aims to push pharmaceutical manufacturing back to the US, but analysts warn that it could have far-reaching consequences for both countries. India’s pharmaceutical sector, which generates a significant portion of its revenue from the US market, could face major setbacks. Indian companies such as Dr Reddy’s, Aurobindo Pharma, Sun Pharma, Zydus Lifesciences, and Gland Pharma, which rely on the US market for a substantial part of their revenue, may be particularly affected.
The tariffs, expected to be “major,” could lead to increased costs for US consumers and insurers, and potentially cause inflation and drug shortages. The US heavily relies on low-cost Indian generics to maintain affordability in healthcare, and a tariff regime could disrupt this arrangement. Indian drugmakers already operate on tight margins, and tariffs would force them to raise prices, making their products less competitive in the US market.
As the US government continues to develop its trade policy, Indian pharma exports may face an uncertain future, further adding pressure to the industry grappling with FDA compliance challenges. The US-India trade relationship is already under strain, and the tariff move could exacerbate tensions between the two nations. Analysts warn that both countries will bear the brunt of this move, which could set back India’s competitiveness in the global pharmaceutical market.