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The US Administration has exempted pharmaceuticals from reciprocal tariffs underscoring the critical role played by generic medicines globally, Indian Pharmaceutical Alliance (IPA) Secretary General Sudarshan Jain said on Thursday. President Donald Trump, in a historic measure to counter higher duties on American products imposed globally, on Wednesday announced reciprocal tariffs on about 60 countries. He announced 27 per cent reciprocal tariffs on India saying New Delhi imposes high import duties on American goods.
However, pharmaceuticals and other essential items are exempted from the increased import duty. The decision underscores the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security, Jain said in a statement. India and the US share a strong and growing bilateral trade relationship, with a shared vision to double trade to USD 500 billion under the Mission 500 initiative, Jain stated.
Pharmaceuticals remain a cornerstone of this partnership, as India plays a vital role in global and US healthcare by ensuring a steady supply of affordable medicines, he added. The Indian pharmaceutical industry is committed to advancing the shared priorities of both nations: strengthening medicine supply chain resilience and reinforcing national security by ensuring access to affordable medicines for all, Jain noted. IPA is a network of top 23 Indian pharma companies, including the likes of Sun Pharma, Dr Reddy's Laboratories, Lupin, Torrent and Glenmark.
The pharmaceutical sector, India's largest industrial export, was estimated at USD 12.72 billion in 2024. Indian pharmaceutical companies supply a substantial proportion of drugs to US residents, with four out of ten of all prescriptions filled in the US in 2022 being supplied by Indian companies.
As per industry sources, medicines from Indian companies provided USD 219 billion in savings to the US healthcare system in 2022 and a total of USD 1.3 trillion between 2013 and 2022. Generics from Indian companies are expected to generate an additional USD 1.
3 trillion in savings over the next five years. Sector experts had earlier noted that the enhanced tariffs on pharma imports in the US can severely impact Indian drug manufacturers as it would lead to higher production costs, making shipments less competitive against products from other countries. Smaller drug firms operating on thin margins can face severe pressure potentially forcing consolidation or closure, they had opined.
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