US considers 25% tariff on Indian pharmaceuticals

The Pharmaceuticals Export Promotion Council of India, known as Pharmexcil, is working to improve market access for Indian drug exports. The U.S. government is considering a 25% tariff on imported pharmaceuticals, which could impact Indian exports significantly. Currently, Indian pharmaceutical exports are growing. They reached $27.9 billion from April 2023 to February 2024. The U.S. is India's largest market, accounting for $8.7 billion of exports in 2022-23. However, trade barriers and regulatory challenges complicate this relationship. Pharmexcil is focused on overcoming non-tariff barriers like regulatory approvals and import restrictions. It aims to ensure that Indian companies can compete effectively, especially as the proposed tariffs could make Indian drugs less competitive in the U.S. market. Pharmexcil's Vice-Chairman, Bhavin Mukund Mehta, emphasized the need for Indian exporters to report specific trade hurdles so they can be addressed. The council is also helping to clear issues that limit exports, such as regulatory and pricing problems. In addition to the U.S., India is looking to expand its pharmaceutical exports to Africa, Latin America, and Southeast Asia. These regions are increasingly interested in affordable generic drugs, and Pharmexcil is working to facilitate smoother market entry. India is also trying to reduce its dependence on China for active pharmaceutical ingredients (APIs). Currently, about 65% of India's API needs come from China. The Indian government has introduced a ₹15,000 crore Production Linked Incentive scheme to boost domestic API production. Mehta believes that achieving API self-sufficiency is crucial for the industry's long-term success. Pharmexcil is committed to helping companies obtain necessary approvals and investments to strengthen India's role as a global supplies of drug ingredients. Despite challenges, Mehta is optimistic about reaching $65 billion in pharmaceutical exports by 2030. The focus is on not just increasing volume but also offering high-value pharmaceutical products.