Chennai: U.S. President Donald Trump announced Friday that in his trade policy, the pharmaceutical sector will soon impose “a level that has never been seen” tariffs after it exempts the industry from reciprocity tariffs on April 2.
On April 2, while reciprocity tariffs were announced, Trump exempted drugs, as well as semiconductors and certain minerals from the list. But, on Friday, he turned around and said the industry would impose tariffs soon.
Speaking to reporters at Air Force One, Trump said: “Pharmaceutical fees will be raised at a level you have never really seen. We see drugs as a separate category. We will announce that in the near-close future, not too far. Review is now under review.
The United States is the main consumer of India’s general drug, nearly one-tenth of the drug is the patented drug. This helps the U.S. government save billions of dollars in health care spending, besides making medicine affordable for consumers.
In India, medicines are the main export category, with goods worth $27 billion, of which 30% or about $8.2 billion value, the United States is consumed by the United States. As of now, India imposes an average of 10% responsibilities on U.S. drugs, while Indian drugs are taxed at zero percent.
Trump has been talking about imposing tariffs since Trump took charge of the office. But while many are skeptical about his plan, the decision to keep the industry away from the countdown tariffs is a breath of the pharmaceutical industry.
“Although the reciprocal tariffs have been positive for pharmaceutical companies, we are concerned about future inconsistencies in his policies,” said Ravi Uday Bhaskar, former director-general of the Indian Council on Pharmexcil’s Export Promotion (Pharmexcil).
According to him, the Indian government should recognize its power to provide generic drugs to the world and make health care affordable and maintain basics.
“The demand for medicines will not meet tariffs. American consumers may buy smaller clothes or jewelry, but they can’t stop buying medicines. Trump will negotiate with us when health care costs increase,” he said.
Furthermore, the government cannot push pharmaceutical companies to set up manufacturing facilities in the country within three to four years and start providing medicine to their people.
“In addition, pharmaceutical companies cannot produce generic drugs in the United States at an affordable level that we constitute. The cost will increase by at least 30%. So we should recognize our strength and negotiate on our own terms,” he said.
At the same time, the pharmaceutical sector should consider a wide range of export markets to reduce its reliance on the U.S. market, he added.
