Washington:
Continuing his economic attack, US President Donald Trump said on Tuesday that Washington soon plans to announce a “major” tariff on drug imports. One of the most dependent domestic industries on trade with the US pharmaceuticals sector, the US, can be greatly affected by the move.
Speaking at an event in the National Republican Congress Committee, the US Commander-in-Chief said Tariff would encourage pharmaceutical companies to transfer their operations to the US. Earlier, the Trump administration had kept pharmaceuticals and semi -circulars away from the purview of its mutual tariff policy.
How can India be affected?
America is India’s largest export market for pharmaceutical goods. According to an industry body, pharmaceuticals Export Promotion Council of India, in FY 24, India’s $ 27.9 billion exports, 31 percent or $ 8.7 billion for the US.
In the report, India supplies more than 45 percent of generics and 15 percent of biosimiler drugs used in the US. Dr. Firms like Reddy, Aurobindo Pharma, Zidas LifeSyins, Sun Pharma and Gland Pharma allegedly earn 30-50 percent of their total revenue from the US market.
Both Indo-American will be affected
Experts have warned that the high American tariffs on drug imports can severely affect both Washington and New Delhi as they will increase production costs, price competition for manufacturers and eradicate high prices for customers.
HDFC Securities Analysts told Financial Daily Mint, “If the US starts tariff on the pharma sector, it will affect both countries.”
He explained that the US depends on low -cost generic manufactured in India, and high tariffs will lead to price increase, inflation and lack of drug. Meanwhile, Indian companies, working on thin margin in US generic space, can struggle to absorb costs and pass them to American consumers or insurers.