Namit Joshi, Chairman, Pharmexcil
“India has long been a cornerstone of the global supply chain for affordable, high-quality medicines, particularly in the generic drug market, where it supplies nearly 47 per cent of the U.S.’s pharmaceutical needs. Indian pharmaceutical companies play a vital role in ensuring the affordability and availability of essential medications, including life-saving oncology drugs, antibiotics, and chronic disease treatments. Any disruption to this supply chain will inevitably lead to shortages and escalating prices, ultimately harming U.S. consumers and healthcare systems.
While the immediate consequences of these tariffs will likely result in increased costs for essential drugs, the long-term impact will be even more severe. The U.S. market, heavily reliant on India for Active Pharmaceutical Ingredients (APIs) and low-cost generics, faces a daunting challenge in finding alternative sources that can match the scale, quality, and affordability that India offers. Moreover, efforts to transition pharmaceutical manufacturing and API production to other countries or domestic sources in the US are projected to take several years, at a minimum of 3-5 years, before meaningful capacity can be established.
Pharmexcil remains committed to advocating for the interests of Indian pharmaceutical exporters and the global healthcare community. We continue to engage with policymakers to emphasise the importance of affordable access to medicines and the indispensable role Indian pharmaceutical companies play in meeting the growing global demand for essential drugs.”
Sanjaya Mariwala, Executive Chairman and Managing Director, OmniActive Health Technologies
The 25 per cent penalty and fine are a serious blow to India’s exports, especially when the US has been our biggest trading partner for years. Pharma and electronics are taking the biggest hit. Beyond monetary, this move adds a layer of uncertainty to an already shaky global trade environment.
India isn’t just a key supplier of generics to the US; we are a part of the backbone of affordable global healthcare. These duties may interrupt the smooth trade flow, inflate US drug costs, stall treatments, and put even greater pressure on American healthcare budgets. Back home, the profits for Indian pharmaceutical firms may decline, and R&D may stagnate, slowing down innovation and stalling new drug clearances.
Since Trump’s return, the change in trade tone has been clear. It’s a wake-up call—India must double down on securing Free Trade Agreements with other major economies. These aren’t just about market access; they’re about securing India’s place in the world economy and advancing the vision of a ‘Viksit Bharat’. India needs to act fast, and more importantly, act smart. Clear, confident diplomacy is the need of the hour.”
Maitri Sheth, Equity Research Analyst- Pharma Sector, Choice Broking
“The US has announced a 25 per cent general tariff on Indian imports, effective August 1, 2025. However, drug formulations and APIs are currently excluded from this tariff, consistent with the April 2025 reciprocal tariff framework, where pharmaceuticals were explicitly exempted.
That said, we flag the ongoing Section 232 investigation into pharma imports by the U.S. as a medium-term overhang, with the potential for pharma-specific tariffs to be announced in the coming weeks or months. In the absence of clarity on the potential rate and scope of such tariffs, it remains difficult to quantify the impact on Indian pharma players at this stage.
Notably, the U.S. remains heavily reliant on India for its pharmaceutical needs, with ~50 per cent of generic drugs sourced from India. Given the critical nature of healthcare and already elevated healthcare costs in the U.S., we view the likelihood of material near-term tariffs on pharma as low.
From our initial management interactions, we understand that:
- Larger players with manufacturing facilities in the U.S. are likely to remain broadly insulated;
- Others anticipate a limited impact, with plans to pass on incremental costs to customers where feasible.
In our view, while the headline risk persists, the structural dependence on Indian pharma and the cost sensitivity of the U.S. healthcare system provide a strong case against aggressive tariff action on the sector.”
Pavan Choudary, Chairman, Medical Technology Association of India, MTaI
“Donald Trump’s announcement today on Truth Social declaring steep tariffs on India from August 1, is troubling and seems economically shortsighted and strategically misguided.
As a sovereign nation, India makes independent choices in defence and energy based on national interest and long-term strategic priorities. Attempting to punish these decisions through coercive trade measures is not only inappropriate but also counterproductive. Framing a key democratic partner in adversarial terms sends the wrong signal and could jeopardise a relationship built on shared strategic interests and trust.
Stacking India alongside Russia and China, as Trump has done, is an attempt to cast shadows on it before European eyes.
Such mischaracterisation may be coming from a deeper frustration, born of repeated failure to isolate India, despite his numerous public statements aimed at doing so.
It’s worth asking whether the recent clarifications in India’s Parliament by Prime Minister Modi and Foreign Minister Jaishankar – firmly denying Trump’s role in the Indo-Pak ceasefire – have influenced this drastic move. If so, it is unfortunate that straight talk is being met with punitive action.
History, too, offers a sobering lesson. In 1930, the U.S. passed the Smoot-Hawley Tariff Act, slapping steep duties on imports. What followed was catastrophic: U.S. exports fell by 61 per cent, international retaliation ensued, and American farmers and industries suffered immensely. The resulting economic pain deepened the Great Depression and compelled a course reversal through the Reciprocal Trade Agreements Act of 1934, which reduced tariffs and promoted long-term trade liberalisation. The USA stayed the flag bearer of this economic doctrine for the next nine decades throughout the world!
Yet, despite the clear historical evidence, protectionist impulses resurface – this time aimed at partners, not a rival. Left unaddressed, such missteps could shift Indo-U.S. ties from cooperation to caution.”