New Delhi: Indian drugmakers—especially those most dependent on the US for trade—were relieved Wednesday as pharmaceuticals escaped the heavy reciprocal tariffs announced by the Trump administration, but there was no such luck for the country’s fledgling medical devices industry.
The 26 percent retaliatory tariffs imposed on India apply to medical devices—among commodities in several other sectors—exported from the country to the US, and the industry is worried that it “may pose a significant challenge to the sector’s growth”.
India exports drugs and vaccines worth $9.7 billion to the US annually, mainly comprising generic versions or cheaper copies of brand-name drugs created after patents expire—and is the supplier of nearly 47 percent of essential medicines in America.
Any tariff imposed on the medicines imported from India to the country would have considerably driven up the cost of life-saving drugs there and led to a rise in medical inflation, trade analysts had estimated.
“Pharmaceuticals remain a cornerstone of US-India partnership, as India plays a vital role in global and US healthcare by ensuring a steady supply of affordable medicines,” Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance (IPA), told ThePrint.
“The decision (to exempt drugs from reciprocal tariffs) underscores the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security.”
IPA is a network of 23 top pharma companies from India, many of whom earn nearly 30-50 percent of their sales revenues with business in the US.
As the Wednesday speech by US President Donald Trump made it clear that tariffs on pharmaceutical imports may not be totally off the table and can be considered at a later stage, Jain however also stated that the association was “studying the details related to the latest announcement”.
Pharma companies “will come roaring back”, Trump had said Wednesday, referring to big pharma increasing its manufacturing in the US.
“We’re going to produce the… medicines that we need right here in America,” Trump had said.
Insisting that the Indian pharmaceutical industry is committed to advancing the shared priorities of both nations, strengthening medicine supply chain resilience and reinforcing national security by ensuring access to affordable medicines for all, Jain meanwhile told ThePrint that all the modalities related to the announcement are being examined in detail.
Viranchi Shah, senior member and former president of the Indian Drug Manufacturers Association (IDMA), the largest group of generic drugmakers, meanwhile said that given the US’ heavy dependence on generic medicines from outside, the commodity made a strong case for making it in the exemption list.
“I see it as a move that has been thoroughly thought through,” he told ThePrint. “This protects the unhindered supply of affordable, high-quality medicines to the US, reinforcing the strong healthcare partnership between our countries.”
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Blow to medical device segment
If the latest declaration has brought ease in India’s drug industry, which had been on edge for months since an indication of reciprocal import tariffs on medicines was first given, the mood in the medical device industry can be described as one of distress.
India’s medical device exports to the US stood at $714.38 million, consisting primarily of low-value, high-volume consumable and disposable products, diagnostic kits, reagents, and surgical instruments, but also some implants such as artificial joints and dental implants.
The imports from the US to India, which included some of the most sophisticated implants such as cardiac stents and orthopaedic implants, and equipment like surgical robots and Magnetic Resonance Imaging (MRI) machines, on the other hand, were significantly higher at $1,519.94 million in 2023-24, as per data by the Exports Promotion Council of Medical Devices.
“Interestingly, India and the US are the biggest markets for each other in the medical devices segment,” pointed out Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AiMeD), an umbrella body representing Indian medical device manufacturers.
India levies a duty of 0 to 7.5 percent—mostly 7.5 percent—on imports of medical devices from all countries, while the US, prior to the 2 April announcement, levied an import duty of zero to 6 percent—mostly zero—on medical devices.
“The new tariff is likely to impact Indian medical device exports, and we have to explore windows of opportunities where the US has been seeking to diversify its supply chain dependence on any one nation,” Nath underlined.
Pavan Choudary, chairman, Medical Technology Association of India (MTaI)—a group of multinational device makers—said that the US administration’s decision to impose reciprocal tariffs does not reflect informed policymaking.
“The decisions of reciprocal tariff on Indian imports stem from trade imbalances and perceived non-tariff barriers in sectors like medical devices and are intended to protect domestic industries but could inadvertently stifle the spirit of free and fair trade that benefits both nations,” Choudary said.
Instead of escalating trade restrictions, both countries should move to a more strategic, non-protectionist and cooperative approach that would serve long-term economic interests, he said.
Industry sources also highlighted that the new tariffs add to the regulatory challenges Indian manufacturers already face in the highly regulated US market, where securing approvals from the US Food and Drug Administration (FDA) requires compliance with stringent norms.
Depending on the classification of the device, Indian firms are required to pay anywhere between $9,280 and $540,000 for FDA regulatory clearance.
‘India did not emphasise enough on its role’
Some pharma trade experts, while welcoming the US administration’s move to exempt pharmaceuticals—one of India’s key export items—from the new reciprocal tariff regulations, also expressed displeasure at the industry and the Indian government’s handling of the situation.
“India-made generics are the cornerstone of healthcare in the US and have led to savings in billions to the US economy over the years. Also, there is no alternative to the US for procuring low-cost, high-quality medicines, which India supplies in huge amounts there,” G Uday Bhaskar, former director general of the Pharmaceutical Export Promotion Council of India under the Union Ministry of Commerce and Industry, told ThePrint.
“However, I am disappointed that neither the industry leaders nor the government (India) negotiated enough with the US administration to make this point and did not emphasise enough on this strength—either in public or in bilateral meetings as far as my understanding goes.”
Indian companies, he underlined, were instead pressuring the government here to reduce the import duty on drugs being imported from the US, in order to placate the Trump administration.
“Ultimately, what the US has done now is to suit its own interest, but given the unpredictability of the administration there, I do not think this crisis in the Indian pharmaceutical industry has been completely averted,” Bhaskar said.
(Edited by Radifah Kabir)
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