As US President Donald Trump continues to intensify his trade offensive, India’s pharmaceutical industry is preparing a strong defence — even though it has so far avoided the immediate impact of new US tariffs.
While drug formulations and active pharmaceutical ingredients (APIs) are currently exempt from the 25% additional tariffs, the relief appears to be temporary. Recognising the uncertainty ahead, Indian drugmakers are already deploying a multi-pronged strategy to cushion any potential blow.
“The recent executive order by the US Administration excludes the pharmaceutical sector from immediate tariff imposition,” confirmed Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance.
Exemption Now, But Threat Still Looms
The US Department of Commerce is conducting a Section 232 investigation to assess if pharma imports could pose a national security risk.
The final report is due by December 27, 2025, with a presidential decision expected by March 2026.
“Generic medicines are critical to affordable healthcare in the US and operate on razor-thin margins,” Jain added, emphasizing why the exemption may not last forever.
Also Read: Reliance Cautions on Tariff Uncertainty in Oil-to-Chemicals Segment
Indian Pharma’s Proactive Response
Despite the temporary protection, Indian pharmaceutical companies are not taking any chances. The industry is now actively:
Diversifying geographically to reduce over-reliance on the US.
Strengthening supply-chain resilience to avoid disruptions.
Acquiring assets in the US to secure local operations and protect market access.
This multi-pronged strategy is designed to safeguard exports, maintain competitiveness, and ensure uninterrupted access to the world’s largest pharma market.
“Indian pharma is not in the immediate line of fire, but we know it’s only a matter of time,” said an industry insider.
Why This Matters
The US remains one of the largest export destinations for Indian generic drugs, and any policy shift could have significant implications for pricing, access, and profitability.
Indian companies are now focusing on long-term resilience rather than short-term gains, aligning their strategies with a rapidly evolving global trade landscape.
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