Indian Pharma Plans Global Expansion as U.S. Tariff Looms

The pharmaceutical enterprises in India to expand their market beyond the United States, as Trump administration proposed a tariff of 25% on pharmaceutical imports threatening the preferential status they have held.

India supplies 45-50% of generics used in the U.S. However, some Indian industry officials have pointed out that due to the imposition of tariffs, Indian drugs would become costlier to the extent that export performance would be negatively affected.

The pharmaceutical industry was valued at 55 billion US dollars in 2023, of which 27 billion was said to come from exports. Bain and Company predict that the market will rise to 130 billion dollars by the year 2030 and reach 450 billion dollars by 2047. However, the proposed tariff may reduce exports to the U.S., convincing Indian firms to explore other areas.

Sanjaya Mariwala, Executive Chairman and MD, OmniActive Health Technologies Ltd. and President of IMC Chamber of Commerce and Industry said, "The tariffs development reinforces the necessity for Indian pharma to establish global trade relationships outside the US. Being the ‘Lifeline to global healthcare,’ our pharma segment must also invest in R&D, building strong local partnerships to improve market access and make use of government support to achieve long-term growth".

The IMC's Bharat Calling is promoting opportunities in Africa, Latin America, and the Middle East. Analysts emphasize value chain diversification into markets such as the European Union, Southeast Asia and the Middle East. These markets are seen as high-geo potential with better regulation and increased health needs, specifically an increase in demand for affordable and high-quality generic drugs.

“Given India’s dominant role in supplying affordable medicines to the U.S., any tariff hikes are unlikely to significantly impact export volumes. Additionally, the existing low-duty structure on Indian pharma products and India’s balanced trade policies make the likelihood of steep reciprocal tariffs slim", said Amrut Naik, President and Head, International Markets Business, Zydus Lifesciences.

Indian pharmaceutical companies would balance the risks of U.S. inclusivity by furthering their market exposure and leveraging strengths in generics, biosimilars, and research offshoring. Diversifying export destinations would mean a resilient supply chain with wider access to essential medicines globally.