Indian pharmaceuticals have no tariffs; they play a vital role in providing us with affordable medicines

New Delhi April 3 (PTI) The Trump administration has exempted India’s pharmaceutical sector from reciprocity tariffs and recognizes the important role the domestic industry plays in the global supply of affordable drugs, including the United States, including the United States, according to industry participants.

President Donald Trump has announced reciprocity tariffs on about 60 countries on a historic measure to deal with higher tariffs on globally imposed U.S. products.

He announced a 27% reciprocal tariff in India, saying New Delhi imposed high import tariffs on U.S. goods.

However, medicines and other necessary items are exempt from the increase in import taxes.

The decision highlights the critical role of cost-effective, life-saving generic drugs in public health, economic stability and national security, Secretary-General of the Indian Pharmaceutical Alliance (IPA) Sudarshan Jain said in a statement.

He added that India and the United States have a strong and growing bilateral trade relationship, and a shared vision under the Mission 500 Mission 500 program could double trade with $500 billion.

He noted that medicines remain the cornerstone of this partnership, as India plays a crucial role globally and in U.S. health care by ensuring a stable and affordable drug supply.

The Indian pharmaceutical industry is committed to improving the common priorities of both countries: to enhance the resilience of the drug supply chain and to enhance national security by ensuring that all people have access to affordable medicines.

IPA is a network of top 23 Indian pharmaceutical companies, Dr. Reddy’s lab, Lupin, Torrent and Glenmark.

Indian pharmaceutical companies provide a large portion of the medicine to U.S. residents, and in 2022, four out of ten of all prescriptions provided by Indian companies.

According to industry sources, Indian companies’ medicines saved US$219 billion in 2022, providing savings of US$1.3 trillion in total between 2013 and 2022.

Indian companies’ generic drugs are expected to generate an additional $1.3 trillion in savings over the next five years.

PharmExcil vice chairman Bhavin Mukund Mehta said the pharmaceutical sector has become a clear winner.

“As India imports $800 million worth of medicines from the United States and exports $8.7 billion, the strong trade relations between the two countries create a strong win-win situation.

He added: “This transformation into a life-saving drug saves a lot of costs and positions Indian exporters to gain a competitive advantage among their Asian counterparts, further strengthening India’s leadership in the global drug market.”

Human Pharmaceuticals sponsor and CEO Sheetal Arora said President Trump’s decision to exempt drug tax exemption was not only a tactical move, but also an endorsement of critical health care dependencies.

He noted that the U.S. healthcare system relies heavily on India’s strong general manufacturing industry and China’s API production, creating a supply chain that, if damaged, will have direct and serious consequences for patient care.

Building domestic manufacturing capacity to meet these needs will require years of investment, regulatory adjustments and labor development, Arora said.

For India, he noted that exemptions offer strategic opportunities to reshape its pharmaceutical sector.

He added: “By focusing on next-generation generics, accelerating the development of biosimilars and expanding domestic API production, India can reduce geopolitical vulnerability while strengthening its position as a world pharmacy.”

The pharmaceutical industry is India’s largest industrial export, estimated to be US$12.72 billion in 2024.

Shardul Amarchand Mangaldas & Co partner Arvind Sharma said that while the drug is currently exempt from tariff exemptions imposed by the U.S. on the U.S., a potential scrutiny under Section 232 could pose a significant challenge to the industry.

“Since Article 232 mainly addresses national security issues, it is possible to evaluate imports of drugs not only economically but also strategically,” he said.

Section 232 of the Trade Expansion Act of 1962 allows the U.S. government, especially the U.S. president, to take necessary actions to limit the import of items/articles deemed to threaten or undermine the national security of the country.

Pavan Choudary, chairman of the Indian Medical Technology Association, said the decision guarantees the continued flow of affordable and high-quality drugs to the United States, strengthening a strong health care partnership between countries.