Indian Pharma Gets Relief, but Medical Device Makers Face Tariff Challenges

The 'reciprocal tariff' plans of US President Donald Trump do not cover pharmaceuticals, thus, emphasizing the significance of low-priced generic medicines in human health as well as economic stability.

The Indian Pharmaceutical Alliance (IPA) emphasized that India contributes greatly to the healthcare of the United States in that generic medicines are estimated to cover more than 40% of the total prescriptions in the US. This leads to huge savings on the health expenditure of the US. Indian pharmaceutical exports to the US reached $8.7 billion in FY 2023-24, making India a very important supplier. Having more than 700 USFDA-approved plants will certainly help Indian companies contribute to the global supply chain for medicines.

While the medical devices industry has been hit by a 27% tariff on Indian products. India is extremely competitive supplying economical medical devices, especially in low-value high-volume consumables; however, this tariff will adversely affect the exports in the future. Spotting medical device exports from India to the US worth $714.38 million in 2023-24 while high imports by India from the US for medical devices stand at $1.52 billion.

Most industry experts argue that non-tariff barriers are a greater problem than tariffs. Buy American' policy and protectionist measures could dissuade the US market from being attractive to Indian exports, although it might induce investment in US manufacturing. For certain medical consumables, years may take for the US to rebuild local manufacturing, giving India an opportunity to keep its supply role. Cross bilateral mechanisms continue to be important in addressing trade imbalances.