The US president has proposed new duties on pharmaceutical imports
A proposed 25% tariff hike on pharmaceuticals imported into the US could impact Indian companies, potentially leading to supply chain disruptions and increased costs for American consumers, according to CNBC TV18.
On Tuesday, US President Donald Trump told reporters at his Mar-a-Lago residence that sectoral tariffs on pharmaceuticals and semiconductor chips would begin at “25% or higher,” rising substantially over the course of a year.
Trump noted that the tariffs would not be applicable to pharma companies with plants in the US. “We want to give them time to come in because, as you know, when they come in to the United States, and they have their plant or factory here, there is no tariff. So we want to give them a little bit of a chance,” he said, as quoted by Financial Post.
India’s pharma exports to the US were estimated to be $8.73billion in fiscal 2024 – a nearly 16% increase from the previous year – accounting for about 31% of the industry’s overall exports, according to government-backed trade body Pharmaceuticals Export Promotion Council of India (Pharmexcil). A tariff hike would dent drug makers’ margins and make Indian generics less competitive.
The development comes after Indian Prime Minister Narendra Modi met Trump in Washington last week to negotiate trade deals between the two countries.
The two leaders agreed on “elevating” bilateral trade to $500 billion by 2030, more than double the current volume. New Delhi and Washington have also vowed to finalize the first phase of the Bilateral Trade Agreement(BTA), a deal that would address existing barriers, by the fall of 2025.
India’s tariffs on US-made medicines could be a barrier, and removing them might prevent the US from imposing retaliatory tariffs on the Indian pharma industry, according to experts. Indian industry is of the view that these tariffs will impact the US consumer more. Earlier, Sun Pharma MD.
Dilip Shanghvi told ET Now that tariffs, if imposed, will be passed on to consumers. Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance (IPA), has echoed this sentiment. He was quoted by BusinessLine as saying that India is supplying nearly 47% of generic medicines for American patients and contributing significantly to the country’s healthcare savings.
It is not the first time Trump has gone after the healthcare sector for “high drug prices.” In 2017, during his first term as president, accusing pharma companies of “getting away with murder.”
