Indian pharmaceutical exports have narrowly escaped the brunt of US President Donald Trump’s latest tariff salvo, which imposes an additional 25% duty on Indian goods for continued imports of Russian crude oil. The new tariff, announced Wednesday night, takes total duties on Indian imports to 50%.
Drug formulations and active pharmaceutical ingredients (APIs) remain exempt, thanks to the April 2025 reciprocal tariff framework that explicitly carved out pharmaceuticals.
The Section 232 probe, launched by the U.S. Department of Commerce under the Trade Expansion Act of 1962, is assessing whether pharma imports pose a threat to national security. The investigation covers finished drugs, APIs, key starting materials, and medical countermeasures. A final report is due by December 27, 2025, with a presidential decision expected by March 2026.
While the exemption offers temporary relief, Indian drugmakers remain cautious.
“Best case is nothing happens to pharma,” said Pranav Amin, Managing Director of Alembic Pharmaceuticals. “Even if tariffs do come in at 5–10%, they can be absorbed. But anything above 25% could make high-volume, low-margin products unviable.”
India exported $8.73 billion worth of pharmaceuticals to the U.S. in 2024, accounting for 31% of its total pharma exports. Indian generics make up nearly half of all drugs covered by Medicare and commercial insurance plans, saving the U.S. healthcare system $219 billion in 2022 alone.
Still, the threat of pharma-specific tariffs has prompted Indian firms to consider portfolio realignment and manufacturing shifts.
“Larger players with U.S. facilities are likely to remain broadly insulated,” Maitri Sheth, Pharma Analyst at Choice Broking. “Others anticipate limited impact, with plans to pass on incremental costs to customers where feasible.”
For now, the industry is holding its breath—watching Washington, weighing risks, and hoping the structural dependence on Indian generics will outweigh protectionist impulses.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
