08-JULY-2025,02:36PM India’s pharma industry could face significant challenges if new tariffs are imposed by the United States, according to a recent report by SBI Research. The study highlights that nearly 40% of India’s pharmaceutical exports are directed to the US market, making it a critical revenue source for the sector. Any change in trade policies or duties could have a direct impact on earnings, supply chains, and market access for Indian pharma companies.
SBI Research Warns of Potential Pharma Trade Disruption
SBI Research’s findings underline the dependence of India’s pharma sector on the US market. The US has long been the largest importer of Indian generic drugs, valued for their affordability and quality. However, the possibility of increased tariffs or stricter trade policies could result in higher costs for American buyers and reduced competitiveness for Indian exporters.
The report also notes that such disruptions could slow down the growth trajectory of India’s pharma exports, affecting employment and production capacity across the industry.
Pharma Industry’s Global Position at Stake
India is known as the “pharmacy of the world,” supplying affordable medicines to over 200 countries. The SBI Research report warns that if tariffs are imposed, India’s pharma industry might lose its pricing edge in the US, which could prompt American buyers to explore alternative sources.
Moreover, experts fear that smaller manufacturers could be hit harder, as they may lack the financial resilience to absorb additional costs or navigate regulatory hurdles.
Why the US Market Is Crucial for Indian Pharma
The US accounts for the largest share of India’s pharmaceutical exports, particularly in the generics segment. Leading Indian pharma companies like Sun Pharma, Dr. Reddy’s, and Cipla have substantial business operations in the US, with many of their top-selling products registered with the US Food and Drug Administration (FDA).
A tariff hike could lead to delayed approvals, higher compliance costs, and reduced profit margins, impacting both large and mid-sized manufacturers.
Possible Strategies to Mitigate the Impact
Industry analysts suggest that Indian pharma companies should diversify their export markets to reduce dependence on the US. Expanding into emerging markets in Africa, Latin America, and Southeast Asia could provide new growth avenues. Additionally, investing in research and innovation may help maintain competitiveness despite potential tariff barriers.
Conclusion
The SBI Research warning serves as a wake-up call for the Indian pharma industry. With 40% of exports linked to the US market, any tariff-related disruption could have far-reaching economic consequences. To safeguard against such risks, the sector may need to focus on diversification, innovation, and strategic partnerships in new markets.
Source : ANI
