Trump's tariffs shake global pharma—India at the crossroads of crisis and opportunity
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US President Donald Trump early this month announced reciprocal tariffs, sending shockwaves globally, including in India. The move rendered India's pharmaceutical sector, a critical component of the country's trade surplus with the US, particularly vulnerable. A week later, Trump announced a 90-day pause on tariffs against all countries, except China, adding further uncertainty. While the US government said that the pause is temporary, Trump indicated that the US would soon impose major tariffs on pharmaceutical products.The announcement comes at a time when the Indian government has been promoting the domestic pharmaceutical industry as the 'Pharmacy of the World', especially after its critical role in vaccines, essential medicines, and medical supplies during the Covid-19 pandemic. The sector now finds itself at a critical juncture, facing both fresh challenges and unprecedented opportunities.India ranks third in the world for drug and pharmaceutical production (by volume) and exports to nearly 200 countries, with the US as the leading destination. In the first 11 months of FY24, India's pharmaceutical exports to the US surged by 15% over a year, reaching $7.83 billion.Industry stakeholders told ET Digital they are concerned by the way Trump is rewriting the global trade norms but see opportunities if India plays its cards right. There is a consensus that Trump's high tariffs on Chinese pharmaceuticals are expected to create a market opportunity that India should seize.The pharma sector has escaped the harshest impacts of Trump's tariffs, says Virinchi Shah , former President of the Indian Drug Manufacturers Association (IDMA). 'I think it is because Trump also understands the win-wins of trading with us in the pharma sector,' he explains.He is hopeful that a trade deal could emerge within the 90-day window that the Trump administration has now extended. 'India and China have distinct USPs for the US market—India in formulations, China in APIs and biologics. Gaining some understanding during these 90 days would be highly beneficial. If that happens, the market share of Indian players will rise manifold. Leaving government efforts aside, our players need to redo their homework in the US market, exploring the void created, engaging with more industry associations, taking help from the embassy to reach American clients, and realigning our focus areas accordingly. Many segments might dry up, creating a void that we need to fill,' Shah says.As the 90-day countdown begins, India's pharma sector is adjusting its strategies. The next three months could redefine India's engagement with the US and reshape global supply chains, according to industry officials.Shah also dismissed concerns about Chinese firms now resorting to dumping pharma products in India. 'We have enough safeguards, and every country will be watchful of China's actions in the coming days and months.'Mandeep Singh Basu, Director of New Delhi-based Jagat Pharma, shares Shah's optimism, stating, 'Trump's tariff onslaughts presented a great opportunity for Indian pharma and Ayurvedic companies. There is quite a gap in the supply of APIs and affordable medicines due to the US tariffs on Chinese pharmaceuticals. This phase goes beyond simply replacing China. India already holds certifications like WHO-GMP and ISO, strengthening global credibility.'He adds that the US will continue relying on India for essential medicines, especially for chronic diseases. 'But the relationship's longevity depends on reforms, innovation, and regulatory compliance.'Experts believe that India's pharma sector is comparatively better positioned than those of other nations. Nisha Taneja, professor at think tank ICRIER , says, 'Despite the Trump administration's imposition of reciprocal tariffs, India's pharmaceutical exports to the US remain largely insulated, with 99.9% of India's pharma export value exempted due to product exclusions specified in the executive order. This is not surprising, as a significant portion of the US population relies on affordable generic drugs. In fact, India is the 5th largest exporter of pharmaceuticals to the US.'As global trade rules are redrawn, the industry's unanimous view is that India's pharmaceutical industry must move swiftly—not just to seize the moment but to secure its place in a rapidly shifting global order.According to Arushi Jain, Director - Growth and Strategy, Akums Pharma, the changing trade environment is a two-edged situation for India—possible disruption, but also a tremendous strategic opportunity. "India will have to act quickly and smartly. This involves improving regulatory coordination, and spending on innovation, strengthening the API infrastructure and indigenous capabilities. Cutting down on over-reliance and developing stronger trading relations with African, Southeast Asian nations etc will also be critical. Essentially, even as the short-term volatility may test the sector, India's pharma sector has a special opportunity to redefine its global presence for the better," she adds.Nikkhil K Masurkar, CEO of Entod Pharmaceuticals, points out that India's pharmaceutical industry might face some short-term challenges, but in the long run, its position as a key global supplier, particularly to the US, remains strong. 'What India offers in terms of cost, quality, and scale is not easy to replace. Manufacturing the same medicines in the US would take time and lead to higher prices because of regulatory and pricing hurdles.'He also cautions against overdependence on one market. 'Over 30% of our pharma exports go to the US; that's risky. We must build stronger ties with Asia, Africa, and Latin America.'Domestically, too, according to Masurkar, there is untapped potential. 'Nearly 900 million Indians still pay full price for medicines. With better access, innovation, and investment, we can build a future-ready pharma industry that supports both India and the world,' he adds.
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Get real-time insights, financial reports, and investment strategies—only on News18. tags : Nifty 50 sensex Location : New Delhi, India, India First Published: June 15, 2025, 15:44 IST News business » markets Nifty Tomorrow, June 16: How Will Israel-Iran War Impact Markets? Experts Analyse, Give Key Levels
