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Experts call for strategic review to assess pharma import dependence amid US tariff barriers
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Shardul Nautiyal, Mumbai
April 08 , 2025
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Industry leaders recommend that Government should initiate a comprehensive analytical and impact assessment study to evaluate the implications of the vulnerabilities like import dependence on Chinese raw material and the reciprocal tariffs from the US administration.
US President Donald Trump on April 2, 2025 listed the high tariffs charged by India on American products as he announced reciprocal tariffs on countries across the board, declaring a 26% discounted reciprocal tariff on India.
Despite efforts to strengthen domestic capabilities, India continues to rely heavily on China for essential pharmaceutical raw materials, including key excipients. This dependency, starkly exposed during the Covid-19 pandemic, led to price surges of up to 50%, disrupting supply chains and eroding profit margins.
Compounding the challenge, the US Trade Representative’s (USTR) 2025 National Trade Estimate (NTE) Report has raised red flags over India's high customs duties on drug formulations, which in some cases exceed 20% even on critical and life-saving medications. With the US accounting for nearly 30% of India’s pharma exports, any retaliatory tariff action could deliver a significant blow to the sector.
Further aggravating tensions, the USTR criticized India’s stringent price controls on medical devices, particularly coronary stents. Since 2017, the National Pharmaceutical Pricing Authority (NPPA) has reduced stent prices by up to 80%, prompting formal objections from US stakeholders who argue these controls limit market access and suppress innovation. The report claims such caps fail to adjust for inflation, rising input costs, or technological advances, creating additional barriers for American exporters.
Industry analysts are urging the Indian government to act swiftly. A collaborative policy approach, bringing together regulators, manufacturers, and international trade partners is being recommended. This will address trade friction, pricing regulation, and import dependency.
Without a clear roadmap and strategic reassessment, India can tackle the risk of jeopardizing its position as a global pharmaceutical leader while straining ties with a major trading partner. A timely, data-driven impact study could be key to preserving both national health security and economic competitiveness.
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