High tariff to force India’s pharma sector to look beyond the U.S.

Indian pharma companies urged to diversify beyond U.S. market due to potential 25% tariff, focusing on global expansion for growth.

Its time for Indian pharma companies to look beyond the U.S. market as the Trump administration has threatened to impose 25% tariff on pharmaceutical imports. This move would disrupt India’s dominant position in the U.S. market, where it supplies over 45% of its generic medicines, industry officials said.

As of 2023, the size of India’s pharmaceutical sector was estimated at about $55 billion, and the global export pie was worth $27 billion. As per a report by Bain & Company market is projected to touch $130 billion by 2030 and $450 billion by 2047. 

It is feared that going forward Pharma exports to the US would shrink as the higher tariff would make Indian drugs expensive.

“The tariffs development reinforces the necessity for Indian pharma to establish global trade relationships outside the US. Being the ‘Lifeline to global healthcare,’ our pharma segment must also invest in R&D, building strong local partnerships to improve market access and make use of government support to achieve long-term growth,” said Sanjaya Mariwala, Executive Chairman and MD, OmniActive Health Technologies Ltd. and President, IMC Chamber of Commerce and Industry.

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Many initiatives have been taken by industry bodies such as IMC’s Bharat Calling to explore opportunities in the African, Latin American, and Middle Eastern markets.

“Given India’s dominant role in supplying affordable medicines to the U.S., any tariff hikes are unlikely to significantly impact export volumes,” said Amrut Naik, President and Head, International Markets Business, Zydus Lifesciences Ltd. “Additionally, the existing low-duty structure on Indian pharma products and India’s balanced trade policies make the likelihood of steep reciprocal tariffs slim.”