The pharmaceutical industry remained unscathed getting an exemption from the reciprocal tariff U.S. President Donald Trump announced on a wide range of imports from countries, big, small and powerful across the globe, as a retaliatory measure against the levy imposed by them on U.S. goods.
The Indian pharma industry, which over the years garnered global attention with its generic, affordable drugs was quick to welcome the exemption, and also saw share prices of the companies surge on the stock exchange. Some analysts and experts, however, sought to sound a caution against early celebrations as the prospect of U.S. introducing a tariff at a later stage cannot be ruled out.
But it was the exemption that mattered most for the industry, which ever since Mr. Trump threatened about introducing reciprocal tariff, had been closely monitoring the developments besides lobbying with the Government of India.
Pharmaceuticals have been exempted from tariffs, Indian Pharmaceutical Alliance (IPA) Secretary General Sudarshan Jain said on Thursday, seeking to highlight how the decision underscores the critical role of cost-effective, life-saving generic medicines in public health, economic stability and national security.
Pharmaceuticals remain a cornerstone of the Indo-U.S. partnership with India playing a vital role in global and U.S. healthcare by ensuring a steady supply of affordable medicines. The Indian pharmaceutical industry is committed to advancing the shared priorities of both countries – strengthening medicine supply chain resilience and reinforcing national security by ensuring access to affordable medicines for all, he said in a statement.
The Pharmaceuticals Export Promotion Council of India, a body under the Commerce Ministry, welcoming the exemption said the decision secures uninterrupted flow of essential and affordable medicines to Americans reinforcing India’s unwavering commitment to quality and reliable supply.
“Pharmexcil welcomes U.S. tariff exemption… express our gratitude to the Government of India for successfully negotiating exemption of Indian pharmaceuticals from U.S. reciprocal tariffs. Indian pharmaceutical industry is dedicated to strengthening the India-US healthcare partnership,” Chairman Namit Joshi said.
Separately, Pharmexcil Director General Raja Bhanu said, “We thank the Ministry of Commerce for having extensive and elaborate discussions with U.S. counterparts to ensure pharmaceuticals are exempted. The industry will ensure the seamless supply of quality and affordable medicines.”
Senior Director at Crisil Ratings Anuj Sethi said the U.S. Administration had exempted pharmaceuticals from reciprocal tariffs given the focus on enhancing availability of affordable medical care of the US citizens. India exported about $8 billion of pharma products to the U.S. in FY24, its largest export destination, and supplies about 40% of generics consumed in the U.S. This move by the U.S. will help sustain exports. India has more than 650 manufacturing facilities approved by the U.S. Food and Drug Administration, the second highest outside the U.S.
However, the possibility of tariffs being imposed by the U.S. on pharmaceuticals at a later stage cannot be ruled out. That said, several potentially mitigating factors in the U.S. such as the ongoing drug shortages, higher cost of pharmaceutical production and declining profitability of pharma firms are expected to be taken into consideration before any such imposition.
Shares of all the 20 companies, from Aurobindo Pharma, Dr. Reddy’s Laboratories, Sun Pharma, Lupin, Cipla, Natco Pharma to Gland Pharma, forming part of the Nifty Pharma, gained as the sectoral index of the National Stock Exchange ended the day 2.25% higher.
Published – April 03, 2025 09:14 pm IST
