A year after imposing reciprocal trade tariffs, President Donald Trump has now levied new tariffs on patented pharmaceutical imports, citing national security and supply chain risks. The move aims to pressure pharma companies to manufacture more in the US.
Indian firms dominate the global generic drugs sector, and the exemption of generic drugs proves crucial for India. However, the long-term implications of the tariffs could be more serious, impacting global supply chains in which Indian firms play a vital role.
While Indian drugmakers are unlikely to face immediate challenges, the tariffs imposed on patented drugs and active pharmaceutical ingredients will impact contract manufacturing and supplies to intermediates to multinational pharmaceutical companies.
According to a report, about 90% of India's pharmaceutical exports to the US are generic medicines. However, some Indian companies could still be affected, including those producing branded or specialty drugs, or those supplying inputs for patented medicines.
