India’s pharmaceutical sector wary of upheavals caused by potential Trump tariffs
Made-in-India generic medicines made up nearly half of all prescription drugs in the US in 2022.
A worker inspecting the coating on pills in an Indian pharma manufacturing unit.
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NEW DELHI: India is bracing for possible disruptions to its pharmaceutical industry - where the American market accounts for almost a third of exports - during Donald Trump’s presidency.
Among the firms that manufacture generic medicines and exports its products to the United States is Bangalore-based pharmaceutical company Bioplus Life Sciences.
It is a crucial part of its business that brings in a substantial chunk of the company’s annual revenue of nearly US$1 million. However, the firm’s chairman Sundeep Aurora is not discounting that its takings could be impacted by Trump’s tariffs.
“You're going to have a 10 to 20 per cent cost increase, perhaps into the US. And certainly, there's going to be a realignment of supply chains around the world,” he said.
Made-in-India generic medicines made up nearly half of all prescription drugs in the US in 2022, according to the Indian Pharmaceutical Alliance. They accounted for about US$8.7 billion worth of pharma exports from India to the US in the previous financial year.
Trump, who will be sworn in as the US’ 47th president on Monday (Jan 20), has pledged to impose reciprocal tariffs in retaliation for the high tariffs imposed by India on imports of some American products.
Indian drugmakers are also worried about Trump’s America First policy, which could see a boost in domestic manufacturing and less need for Indian exports.
POTENTIAL SHIFT TO HOLISTIC MEDICINE
The companies are also concerned about what the impending appointment of Robert F Kennedy Jr as health secretary would mean for them. Kennedy Jr has touted holistic healing over modern medicine.
"Over here, we're going to see a collision. The suggestions and ideals of holistic healing - changing your diet versus getting medically treated. These are all wishful thinking in the modern world today,” Bioplus’ Aurora.
“This is a highly regulated industry so it takes a few years for any change to occur."
Amid the potential downsides for the Indian pharmaceutical sector, one silver lining could come from the Biden administration’s Biosecure Act of 2024.
The law requires US federal agencies to stop procurement from what it calls “companies of concern” by 2032. These include some of the world’s biggest generic drug makers - Chinese firms Wuxi and Wuxi Biologics.
BANKING ON US LAW
Some industry players believe this could lead the US to rely more on India's drugmakers.
"In their own interest also, they’re looking for alternative supply. Definitely, India has resources, potential and capability to come as a replacement of China. We have huge technical manpower at our disposal, we have the wage (advantage) with us, we have economies of scale,” said Dr Ajay Sahai, director general and CEO of Federation of Indian Export Organisations.
Dr Sahai believes India’s drug exports globally could more than triple from US$27.8 billion currently to US$100 billion by 2030.
However, this will hinge on Indian drug makers ramping up manufacturing substantially amid issues with quality control.
India’s drug regulator shut down more than a third of the 400 drug manufacturing plants it inspected in 2024, after deaths linked to Indian-made cough syrups in Gambia and Uzbekistan prompted scrutiny.
Firms like Bioplus are banking instead on the need for new drugs like a therapeutic medicine for myopia in children.
It hopes constant innovation will help it navigate the uncertainties to come from the US, the world's biggest drug market.
