US Healthcare Could Feel the Blow of New Tariffs

India’s pharmaceutical sector has responded to US President Donald Trump’s announcement of a 25 per cent tariff on all Indian imports starting August 1, warning that the move could significantly disrupt American healthcare rather than weaken Indian industry.

While uncertainty remains about whether pharmaceuticals will fall under the new tariff list, the reaction from Indian pharma stakeholders has been swift and pointed.

India's Pharma Sector Stands Resilient

"He is trying to kill the market of the Indian economy, but it is not going to happen," said Dilip Kumar, Chairman of the Chamber of Commerce's Medical Tourism wing. "We are exporters, especially of medical equipment, pharmaceuticals, and disposables, which mostly come from India. The American market is dependent upon Indian and Chinese markets," he added.

Kumar also highlighted India's adaptability, stating, "India won't be impacted, as we will go by the route of exporting to European countries. We can survive in the toughest times and bounce back."

The Global Supply Chain at Risk

Pharmaceuticals Export Promotion Council of India (Pharmexcil) Chairman Namit Joshi emphasized India’s crucial role in the US drug supply chain. "India has long been a cornerstone of the global supply chain for affordable, high-quality medicines, particularly in the generic drug market, where it supplies nearly 47 per cent of the pharmaceutical needs of the US," said Joshi.

He warned of the immediate consequences: rising drug prices and possible shortages in the US. "Any disruption to this supply chain will inevitably lead to shortages and escalating prices, ultimately harming US consumers and healthcare systems."

Long-Term Challenges Ahead

Joshi pointed out the long-term risks, noting the US market's heavy reliance on India for Active Pharmaceutical Ingredients (APIs) and low-cost generics. Efforts to transition manufacturing to other countries or domestic facilities in the US could take "at least 3–5 years before meaningful capacity can be established," he cautioned.

Despite these challenges, Pharmexcil remains committed to maintaining India’s role as a reliable supplier of affordable medicines, engaging with policymakers to emphasize the importance of affordable access to medicines.