Trump's Tariff Threats Shake Up India's Pharmaceutical Export Hopes

U.S. President Donald Trump's proposed tariffs on semiconductors and pharmaceutical imports threaten India's generics industry, a major supplier to the U.S. market. With 31% of their exports sent to the U.S., leading Indian pharmaceutical companies face potential revenue impacts if tariffs are implemented, risking increased costs for American consumers.

U.S. President Donald Trump announced plans on Tuesday to enforce a '25% or higher' tariff on imports of semiconductors and pharmaceuticals, a decision likely to challenge India's pharmaceutical sector. India's generic drug manufacturers, who predominantly export to the United States, face uncertainty as their largest market hangs in the balance.

As cost-effective alternatives, Indian generic drugs provide significant savings for the U.S. healthcare system. Nearly half of generic prescriptions in the U.S. in 2022 hailed from Indian suppliers, generating $408 billion in savings, according to IQVIA.

Key players like Sun Pharmaceuticals, Dr. Reddy's Laboratories, and Cipla rely heavily on the U.S. market, contributing a substantial portion of their revenue. If tariffs proceed, companies anticipate passing costs onto consumers, potentially affecting drug prices and U.S. healthcare dynamics.

(With inputs from agencies.)