The domestic pharmaceutical industry will have no choice but to increase prices of products meant for the US market if the Trump administration goes ahead and enforces up to a 200% import tariff, sources said. US President Donald Trump has said the country will impose tariffs on pharmaceutical imports and on copper. He noted that the tariff on pharmaceuticals could go up to 200%.
"It is still an evolving situation. We think that it (tariff) cannot be that much because it would also increase the cost for buyers in the US. In the worst-case scenario, if it happens, then we will have to increase the prices accordingly, we don't have a choice there as we operate on low margins," a senior industry executive said.
Smaller drug firms operating on thin margins can face severe pressure, potentially forcing consolidation or closure, he noted.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
India currently levies around 10% import duty on American drugs, while the US doesn't charge any import duty on Indian drugs.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
Icra Vice President & Sector Head Deepak Jotwani said the US is a key market for most Indian pharma companies, accounting for 30-40% of their total revenue.
"Imposition of high tariffs by the US administration on pharmaceutical imports could have an adverse impact on the Indian pharma industry as some increase in costs may need to be absorbed by the companies," he added.
Indian pharma companies largely export generics to the US market, which is already subject to a high competitive intensity, he added.
Imposition of high tariffs could weigh on Indian pharma export growth and profitability, he stated.
"That said, the US has a high dependence on Indian pharma for generics and a tariff shock could result in healthcare cost inflation and even shortages," Jotwani said.
Further, Indian pharma companies may need to look to accelerate their diversification efforts and increase focus on other geographies.
Indian pharmaceutical companies supply a substantial proportion of drugs to US residents, with four out of ten of all prescriptions filled in the US in 2022 being supplied by Indian companies.
As per industry sources, overall, medicines from Indian companies provided $219 billion in savings to the US healthcare system in 2022 and a total of $1.3 trillion between 2013 and 2022.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
