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Business Standard
2 days ago
- Business
- Business Standard
Pharma Inc mulls offshore strategy as US tariff fears hit sentiment
Pharma Inc is brainstorming ways to weather the tariff storm — even though drugs are currently exempt from US tariffs. Several companies that Business Standard spoke to said they were engaged in scenario-building exercises involving mid- and long-term strategies such as offshore manufacturing, diversifying raw material sources, and exploring contract manufacturing in the US. The Nifty Pharma index dipped in early trade but recovered by market close, ending in the green. Aurobindo Pharma closed lower, while most pharma stocks rebounded after the initial decline. (See chart.) US President Donald Trump has imposed an additional 25 per cent tariff on Indian exports over the purchase of Russian oil, effectively raising tariffs to 50 per cent. Pharmaceuticals, however, have been excluded under the recent US Executive Order, as the sector is under review through a Section 232 investigation. On April 14, 2025, the US Department of Commerce's Bureau of Industry and Security (BIS) launched a Section 232 investigation into the pharmaceutical sector. The inquiry aims to assess the impact of specific pharma imports on US economic and national security interests. The Indian industry believes that since generic medicines are critical for affordable healthcare in the US and typically operate on razor-thin margins, ensuring their consistent availability is vital. 'The India–US partnership is key to securing active pharmaceutical ingredient (API) supply chains and enhancing healthcare resilience,' said Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance. An executive director of a leading Indian drugmaker with a strong US presence told Business Standard, 'Generics are about access to medicines, and India is about low-cost manufacturing. China is not interested in generics, and currently, there's no viable alternative to India for the US.' He added that companies are evaluating multiple options to safeguard interests, with the US accounting for 35 per cent of India's total pharma exports. 'In the short term, discussions revolve around how much of the tariff—if imposed—can be passed on. This will vary across molecules. Where some Indian players slash prices, others may find the market unviable and exit, which could lead to drug shortages in the US,' he said. Another strategic consideration is offshore manufacturing. 'Indian companies are actively evaluating the feasibility of shifting some manufacturing to the US. Some firms already have a presence there, but such moves have long gestation periods,' said an industry veteran. He elaborated that conversion costs — the cost of turning raw materials into finished products — are nearly 3–4 times higher in the US, largely due to labour. 'Manpower accounts for nearly 70 per cent of conversion costs. Shifting manufacturing to the US raises overall production costs by 1.5 times compared to India,' he said, adding that firms are also exploring contract manufacturing models. 'One option is to split the contract — processes A to X in India, and Y and Z completed in the US,' the official explained. Another idea circulating within the pharma sector is whether India should increase its alignment with the European Union. 'It doesn't make sense to manufacture in every country — Europe can't be painted with one broad brush. But expanding the footprint in the EU to reduce exposure to US policy shifts is under serious consideration,' said a senior executive. A potential advantage is that US–EU tariffs may differ significantly from India–US rates. Raw material security is another priority. 'If tariffs are imposed, Indian exporters won't be replaced overnight, but they'll be disadvantaged. China may opportunistically raise bulk drug prices. Companies are therefore working to diversify sourcing,' said one exporter. India supplies over 40 per cent of the generics used in the US, including for chronic, infectious, and oncological conditions. 'Tariffs on Indian pharma would be counterproductive, ultimately burdening US consumers. Indian companies manufacture low-cost generics — not high-margin products — so any additional cost will be passed on,' said Namit Joshi, chairman, Pharmexcil. 'Replicating India's pharmaceutical capabilities would take 3–5 years at minimum, with major challenges in achieving similar scale, cost efficiency, and talent availability. India has over 700 USFDA-approved facilities, and 12 per cent of industry earnings are reinvested in compliance. Around 55 per cent of Indian pharma exports go to tightly regulated markets like the US, UK, and EU,' Joshi added. What's causing unease is Trump's recent statement suggesting a potential 250 per cent tariff on pharmaceutical imports in future — a move that most in the industry believe is unlikely but alarming. 'A 250 per cent tariff isn't just economically unviable — it's commercially absurd. While it may never materialise, even the threat sends shockwaves through a sector where India supplies the bulk of generics to the US. Anything beyond 25 per cent is a red line. Indian companies won't absorb that cost — they'll pull back, cut volumes, or pass it on. That means fewer drugs and higher prices for US patients. This isn't protectionism — it's self-sabotage. Right now, it's sentiment-driven damage, but if this threat lingers, it could fracture a deeply interdependent supply chain,' said Nirali Shah, pharma analyst, institutional research, Ashika Group.
Economic Times
2 days ago
- Business
- Economic Times
Executive order by US administration excludes Pharma sector from immediate tariff imposition: Indian Pharmaceutical Alliance
Synopsis The Indian pharmaceutical sector has been excluded from immediate US tariff hikes due to the importance of generic medicines for affordable healthcare in the United States. This follows President Trump's imposition of a 25% tariff on India over Russian oil purchases, raising the total tariff to 50%. ANI "Executive order by US administration excludes Pharma sector from immediate tariff imposition": Indian Pharmaceutical Alliance The Indian pharmaceutical sector has been "excluded" from the immediate US tariff imposition, as generic medicines are "important" for affordable healthcare in the United States, said Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance, on Wednesday. This comes after US President Donlad trump imposed an additional 25 per cent tariff on India over the continued purchase of Russian oil. Jain, says, "The recent Executive Order by the US Administration excludes the pharmaceutical sector from immediate tariff imposition. The sector is being reviewed under the Section 232 investigation. Generic medicines are important for affordable healthcare in the US and typically operate on razor-thin margins. Ensuring their consistent availability is critical for patient care" "India-US partnership is key to securing API supply chains and enhancing healthcare resilience," he noted. On Wednesday, US President Donald Trump signed an Executive Order imposing an additional 25% tariff on imports from India, raising the total tariff on Indian goods to 50%. According to the order issued by the White House, Trump cited matters of national security and foreign policy concerns, as well as other relevant trade laws, for the increase, claiming that India's imports of Russian oil, directly or indirectly, pose an "unusual and extraordinary threat" to the United States. After the order, the total tariff on Indian goods will be 50 per cent. While the initial duty comes into effect on August 7, the additional levy will come into effect after 21 days and will be imposed on all Indian goods imported into the US, except for goods already in transit or those meeting specific this announcement, the Ministry of External Affairs (MEA), in its response, termed the US's move as "unfair, unjustified and unreasonable", declaring that New Delhi will take "all actions necessary to protect its national interests."In an official statement, the MEA said, "The United States has in recent days targeted India's oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India.""It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest," the statement added."We reiterate that these actions are unfair, unjustified and unreasonable. India will take all actions necessary to protect its national interests," the MEA stressed.
Time of India
2 days ago
- Business
- Time of India
Executive order by US administration excludes Pharma sector from immediate tariff imposition: Indian Pharmaceutical Alliance
The Indian pharmaceutical sector has been "excluded" from the immediate US tariff imposition, as generic medicines are "important" for affordable healthcare in the United States, said Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance , on Wednesday. This comes after US President Donlad trump imposed an additional 25 per cent tariff on India over the continued purchase of Russian oil. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Jain, says, "The recent Executive Order by the US Administration excludes the pharmaceutical sector from immediate tariff imposition. The sector is being reviewed under the Section 232 investigation. Generic medicines are important for affordable healthcare in the US and typically operate on razor-thin margins. Ensuring their consistent availability is critical for patient care" by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like These Famous Faces Once Walked Campus Halls—Guess What They Majored In Learn More Undo " India-US partnership is key to securing API supply chains and enhancing healthcare resilience," he noted. On Wednesday, US President Donald Trump signed an Executive Order imposing an additional 25% tariff on imports from India, raising the total tariff on Indian goods to 50%. Live Events According to the order issued by the White House, Trump cited matters of national security and foreign policy concerns, as well as other relevant trade laws, for the increase, claiming that India's imports of Russian oil, directly or indirectly, pose an "unusual and extraordinary threat" to the United States. After the order, the total tariff on Indian goods will be 50 per cent. While the initial duty comes into effect on August 7, the additional levy will come into effect after 21 days and will be imposed on all Indian goods imported into the US, except for goods already in transit or those meeting specific exemptions. Following this announcement, the Ministry of External Affairs (MEA), in its response, termed the US's move as "unfair, unjustified and unreasonable", declaring that New Delhi will take "all actions necessary to protect its national interests." In an official statement, the MEA said, "The United States has in recent days targeted India's oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India." "It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest," the statement added."We reiterate that these actions are unfair, unjustified and unreasonable. India will take all actions necessary to protect its national interests," the MEA stressed.
Time of India
24-07-2025
- Business
- Time of India
Pharma, medical device sectors receive right prescription
This is a representative AI image The India-UK FTA is expected to strengthen supply chains for pharma and medical devices sectors, improve access to affordable medicines, and pave the way for collaboration in bulk drugs and joint research. The domestic pharma industry is hopeful exports of generic drugs to UK - currently valued at around $1 billion - will see a boost. Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance, said the pact offers opportunities to supply affordable and quality-assured medicines, contributing to better patient care in the UK. Namit Joshi, chairman of Pharmexcil, added the agreement paves the way for partnerships in bulk drug imports, CDMO, and joint research, strengthening India's competitive edge. The medical devices industry also expects bilateral trade to accelerate. "Earlier, devices imported into UK were duty-free, so tariffs weren't a concern. But regulatory approval costs & timelines were. We had sought UK recognition of Indian CDSCO or QCI certifications to fast-track approvals," said Rajiv Nath, forum coordinator, AiMeD. He highlighted need for stricter Rules of Origin checks to prevent misuse of FTA. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
24-07-2025
- Business
- Time of India
Duty relief to boost pharma companies' access to UK drug stores
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The India-UK FTA is expected to give a strong tailwind to India's pharmaceutical and medical devices sectors with tariff relief and smoother regulatory pathways acting as critical drivers, industry experts told agreement will boost exports giving an easier access to the UK market. It is expected to help Indian companies - especially those in generics and biosimilars - to scale their market presence, fast track product approvals, provide a push to cross-border R&D and UK has committed to zero tariff on nearly 99% of Indian pharma exports. While Indian pharma exports to the UK were largely duty free even earlier, the latest agreement formalises the status which brings in long-term clarity to to industry estimates, the pharma market size of the UK stands at about $45 billion and is expected to shoot to $73 billion by 2033. The share of the Indian drugs can see a significant push from the UK's generics segment which is currently pegged at $5 pharmaceutical exports to the UK crossed $910 million in FY24, according to estimates."The agreement strengthens supply chains , enhances access to affordable medicines , and drives Foreign Direct Investment (FDI)," said Namit Joshi, Chairman of Pharmexcil."This partnership paves the way for collaborations in bulk drug imports, CDMO (contract manufacturing), and joint research, empowering India's competitive edge and promoting global partnerships."The pact will open up trade and economic opportunities between the two countries. "The pharma sector will have opportunities to supply quality medicines contributing to better patient care in the UK," said Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance."The tariffs relief on generic medicines and key medical devices like surgical instruments and diagnostics under the FTA will enhance the affordability and appeal of Indian products in the UK market," said Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat. The move significantly boosts the competitiveness of Indian generics and high-quality affordable healthcare solutions, positioning India to scale its footprint in one of Europe's most valuable healthcare markets, said the medical devices sector too the move is expected to open new opportunities, said experts.
