Experts Urge Review of Pharma Imports as US Tariff Barriers Rise

Industry leaders want the Indian government to undertake an entire impact and vulnerability study to identify the risk associated with importing Chinese raw materials and the implications of reciprocal tariffs from the U.S.

On April 2, 2025, President Donald Trump announced that he would impose a 26% reciprocal tariff on Indian goods on the ground that India had high import duties on American goods. This has added fuel to fire for India's pharma industry, which is still heavily reliant on China for primary raw materials excipients. The pandemic exposed the extent of this dependence, when excipient prices skyrocketed by as high as 50%, stressing supply chains and profit margins.

This situation is further worsened by the U.S. Trade Representative's 2025 NTE report, which criticizes India on customs duties on drug formulations more than 20% on essential medicines. Given that the U.S. also accounts for roughly 30% of India's pharma exports, imposing retaliatory U.S. tariffs could have a substantial hit on the industry.

The USTR also raised the issues concerning India's price control on medical devices, especially coronary stents, which have reduced prices by some 80% since 2017. Although these price controls aim for affordability, they have been criticized as jeopardizing innovation and market access by U.S. stakeholders.

This is a unified policy response, according to industry players, to be forged among regulators, manufacturers, and trade partners to traverse trade tensions yet secure supply and remain competitive. Without a strategic, evidence-based assessment, the country risks dismantling its pharmaceutical leadership and ruining an important trade relationship. A well-timed impact study could set in motion sustainable policy and result in long-term benefits.