India in active talks with domestic pharma exporters amid new US tariff threat

IANS April 4, 2025 166 views

The United States is contemplating unprecedented tariffs that could significantly impact India's pharmaceutical export ecosystem. With India supplying nearly 40% of generic drugs to the US market, the potential tariffs pose a substantial economic challenge. Indian pharmaceutical companies are experiencing stock market volatility, with shares dropping up to 8% in response to the potential trade barrier. The Indian government is proactively engaging with exporters to assess and mitigate potential risks from these proposed trade restrictions.

"We're looking at very substantial tariffs" - Donald Trump, US President
New Delhi, April 4: The Commerce Ministry is in active talks with Indian pharmaceutical exporters amid growing concerns over possible US tariffs on the sector, which was exempted in the first tranche of reciprocal tariffs by US President Donald Trump.

Key Points

1

India supplies 40% of US generic drugs market

2

Pharmaceutical stocks drop sharply on tariff threat

3

Commerce Ministry initiates active export protection talks

The discussions between the government and pharma exporters began after Trump hinted at imposing "never-seen-before" tariffs on pharmaceutical imports (Thursday, US time).

While marginal tariffs may not cause much disruption, steep duties could hurt the profit margins of Indian drugmakers.

The United States is a key market for India’s pharmaceutical exports, with India supplying around 40 per cent of all generic drugs used in the US.

Indian pharmaceutical exports to the US are worth nearly $9 billion annually. Any sharp increase in tariffs could not only affect Indian exporters but may also have a direct impact on American consumers, according to a report by NDTV Profit on Friday.

Trump has introduced a new wave of tariffs targeting multiple sectors. These include a 25 per cent tariff on all imported cars and light-duty trucks, and a 10 per cent minimum tariff on other imported goods.

India has been hit with a compound reciprocal tariff rate of 27 per cent.

The government is reportedly assessing the situation closely and is working with exporters to understand the potential impact and explore ways to mitigate risks, the report mentioned.

The latest Trump statement has left Indian pharma firms worried, many of which rely heavily on the US market for business. The stocks of Indian pharmaceutical companies were trading significantly lower during the day.

Shares of Aurobindo Pharma, Laurus Labs, IPCA Laboratories, and Lupin fell by up to 8 per cent on the National Stock Exchange (NSE) in the intra-day trading.

In the previous trading session on April 3, shares of domestic pharmaceutical companies gained some relief, even as other sectors faced heavy selling pressure. This came after the White House excluded pharmaceutical products from the reciprocal tariffs.

Reader Comments

R
Rajesh K.
This is really concerning for our pharma industry. The US is such a huge market for Indian generics. Hope the government can negotiate something favorable 🤞
P
Priya M.
American consumers will suffer too if prices go up. 40% of their generics come from India! Maybe US should think twice before imposing these tariffs.
A
Amit S.
The stock market reaction shows how vulnerable we are to US policy changes. Time for Indian pharma to diversify their export markets.
S
Sunita R.
While I understand the concern, maybe this is an opportunity for Indian companies to focus more on quality and innovation rather than just competing on price.
V
Vikram J.
$9 billion is no small amount! This could seriously impact our economy if not handled properly. Kudos to Commerce Ministry for being proactive.
N
Neha P.
I work in pharma exports and the uncertainty is really stressful. Hope they reach some agreement soon. The 8% drop in stocks today was brutal 😓

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
US-India Trade Pharmaceutical Exports Donald Trump Indian Pharma Companies Trade Tariffs
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