In anticipation of reciprocal Trump tariffs, the Indian pharma industry is keen for the government to reduce its import tariffs on US pharma formulations and drugs to zero. India imports approximately US$800 million worth of pharma products from the US of which 50% already falls in the zero tariff category with the remaining half taxed at 5 to 10%.
These are mostly expensive orphan drugs used to treat rare and chronic diseases such as cancer, which finance minister Sitharaman has exempted from basic customs duties. In her recent budget statement, the finance minister proposed to add 36 lifesaving drugs to the fully exempted list. Making these cheaper will only help those suffering from rare and chronic diseases.
On the other hand, the US is the largest importer of Indian pharma exports, absorbing over US$ 8.7 billion, or about 31.35% of the total pharma exports of US$ 27.8 billion. Indian exports are relatively small compared to the annual US imports of pharma formulations from Europe, which amount to US$ 200 billion. However, the Indian formulations represent large volumes of lower-priced and affordable drugs including 47% of generic medicine supply in a country that faces more than 250 drug shortages each quarter – according to the American Society of Health-System Pharmacists.
As reported by the financial press on 6 March 2025, the idea of reducing import tariffs on imports of US pharma has been endorsed by pharma industry leaders, largely represented by the Indian Pharmaceutical Alliance. They are hopeful that an amicable solution could be found in the current discussions being held between the two governments.
