Decoding Impact Of U.S. Tariffs On Indian Pharma — Read Motilal Oswal's Analysis

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Motilal Oswal Report

We hosted Mr. Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance, and Ms. Archana Jatkar, Associate Secretary General, IPA, to understand the way forward for the Indian pharmaceutical industry after the announcement of tariffs on pharm imports by the US. Here are the key takeaways from this session:

1. The reciprocal tariffs would have a minimal impact on India pharma exports, as India has an export surplus of medicines to the US.

2. While US President Donald Trump is expected to make a detailed announcement on April 02, 2025, there is work-in-progress for a bilateral trade agreement.

3. The price erosion of 10-11% annually has already reduced the cost of medicines for the US patient pool. The impact of the tariffs, when implemented, would be passed on to patients, thereby increasing the cost of medicine.

4. Government of India has implemented schemes like PLI to promote indigenous manufacturing.

5. India pharma products account for ~44% of the U.S. pharma market by volume and 47% of generics prescriptions. Thus, it would be difficult to replace Indian pharma manufacturers purely by a tariff increase.

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