The Indian Pharmaceutical Alliance (IPA), representing major Indian drug manufacturers, has suggested that the government consider reducing tariffs on US drug imports to zero.
This proposal comes as a countermeasure to the Trump administration’s consideration of a 25 per cent import tariff on Indian pharmaceutical products.
According to IPA Secretary General Sudarshan Jain, the move would not significantly impact India’s economy and could potentially persuade the US government to reconsider its tariff policies.
India currently exports pharmaceutical products worth USD 9 billion to the US, while US pharmaceutical exports to India stand at approximately USD 800 million.
Jain pointed out that 60 per cent of these US imports already face zero tariffs in India, and extending this to all imports could create a fairer trade balance.
“The government is also working on this issue, and we are presenting our viewpoint,” said Jain. He warned that higher tariffs could increase medication costs for US patients and even lead to shortages, as manufacturers might either pass on the added costs or withdraw unviable products from the market.
Jain highlighted that India’s cost of manufacturing is about one-fourth that of the US, and setting up a new pharmaceutical manufacturing plant takes 3-4 years.
He also noted that India’s exports are relatively small compared to Europe, which exports over USD 200 billion worth of pharmaceuticals to the US.
Prominent IPA members, including Sun Pharma’s Managing Director Dilip Shanghvi and Reddy’s Co-Chairman G.V. Prasad, echoed these concerns.
Prasad emphasised that shifting global pharmaceutical manufacturing to the US is impractical and would lead to higher costs for American consumers.
India currently imposes a 10-11 per cent tariff on US pharmaceutical imports, primarily high-value, patented drugs for conditions such as cancer and autoimmune diseases.
To improve affordability, the Indian government recently exempted 36 lifesaving drugs from basic customs duties.