Indian pharmaceutical companies are looking to ongoing discussions between India and the United States to prevent the implementation of President Donald Trump’s proposed tariffs of at least 25% on pharmaceutical imports, according to a trade association. India, often referred to as the “pharmacy of the world,” manufactures cost-effective generic versions of complex, innovative drugs in its large-scale production facilities and exports them to more than 200 countries. Government data indicates that the U.S. is the largest market for these exports.
In the 2024 fiscal year, India’s pharmaceutical exports to the U.S. amounted to $8.7 billion, accounting for approximately 31% of the country’s total pharmaceutical exports, according to data from the government-supported trade body Pharmexcil. The possibility of increased tariffs led to a decline in the stock prices of Indian pharmaceutical companies on Wednesday.
“This (tariff) matter will be discussed through bilateral engagements between the two countries and further steps will be determined accordingly,” stated Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance (IPA), in a statement on Wednesday. “We are confident that continued dialogue among stakeholders will help address the subject.”
Research firm IQVIA reported that in 2022, Indian pharmaceutical companies supplied nearly half of all generic drug prescriptions in the U.S. This contributed to savings of about $408 billion for the American healthcare system, highlighting the crucial role of the Indian pharmaceutical industry in providing affordable, quality-assured medicines.
“This (tariff) move is going to be inflationary to the U.S. as they don’t have the requisite manufacturing infrastructure in-house to replace the scale of supply that India does,” said Vishal Manchanda, an analyst at Systematix Institutional Equities.
The IPA represents several leading Indian pharmaceutical companies, including Sun Pharmaceutical, Dr. Reddy’s, Cipla, and Zydus Lifesciences, along with local divisions of U.S.-based firms such as Abbott.
Earlier this week, Sun Pharma Managing Director Dilip Shanghvi told local media that if these tariffs are imposed, the additional costs will ultimately be passed on to consumers.