U.S. President Donald Trump’s decision to impose 25% tariffs on goods imported from India may interrupt the smooth trade flow, inflate U.S. drug costs, stall treatments, and put even greater pressure on American healthcare budgets, cautioned pharma experts in India. Back home, profits of Indian pharmaceutical firms may decline, and research and development may stagnate, slowing down innovation and stalling new drug clearances, they added.
“India isn’t just a key supplier of generic medicines to the U.S. but also part of the backbone of affordable global healthcare. This latest move is a wake-up call and India must double down on securing free trade agreements with other major economies,” said Sanjaya Mariwala, executive chairman and MD of OmniActive Health Technologies.
“These aren’t just about market access; they’re about securing India’s place in the world economy and advancing the vision of a Viksit Bharat. The 25% penalty and fine are a serious blow to India’s exports, especially when the U.S. has been our biggest trading partner for years. Pharma and electronics are taking the biggest hit. Beyond monetary, this move adds a layer of uncertainty to an already shaky global trade environment,” he added.
Stating that India has long been a cornerstone of the global pharmaceutical supply chain, especially in generics, supplying about 47% of all generic prescriptions in the U.S. in 2022, Bhavin Mukund, vice-chairman, Pharmexcil said, “While we understand the evolving trade policies of our global partners, the proposed 25% tariff on Indian pharmaceutical imports effective August 1 raises concerns about rising costs and potential disruptions in medicine access for U.S. patients. Such policy shifts could inadvertently affect public health outcomes. We remain committed to open and constructive dialogue, and we emphasise the strategic importance of India–U.S. pharmaceutical trade in ensuring affordable, high quality healthcare globally.”
The top five medical device exports to the U.S. include endoscopes, orthopaedic implants, MRI equipment, urinary catheters and electrocardiographs. “If duties by the U.S. on Indian medical device are 15-20% lower than its tariffs on China, exports could rise if manufacturers find it feasible to absorb FDA approval costs and deeming these export costs sustainable,’‘ said Rajiv Nath, forum coordinator at Association of Indian Medical Device Industry (AiMeD).
He further noted that U.S. buyers were looking to diversify their supply chains away from China, and India represented a viable alternative, assuming it can ensure quality, competitive pricing, and agility, while also adhering to environmental, social, and corporate responsibility standards.
He, however, cautioned that India could face a loss of competitiveness to Indonesia and Vietnam, especially in rubber-based products due to their advantageous tariffs and suggested that India needed to enhance its competitiveness in areas beyond pricing.
Meanwhile industry experts said that they awaited greater clarity and also confirmation of duties on Chinese goods. “Should duties on Chinese medical devices return to levels exceeding 50% post-August, and should duties on Indian devices by the USA be established at 25%, export prospects to the U.S. would likely remain favourable in comparison to China. The ultimate impact of duties on the Indian medical device sector is dependent on relative competitiveness. A duty differential of 15-20% between Chinese and Indian products would favour Indian exports to the U.S., potentially incentivising the establishment of production lines within the US,” said Mr. Nath.
Published – July 31, 2025 08:02 pm IST
