India’s pharmaceutical exports to the United States, worth nearly $10 billion annually, may come under pressure as the US government initiated an investigation on Monday into the national security implications of importing medicines and related ingredients.
The probe, launched by the US Commerce Department, will assess the extent to which the country’s reliance on foreign pharmaceutical imports could pose a threat to its domestic healthcare system.
India is among the top five pharmaceutical suppliers to the US, alongside Ireland, Germany, Switzerland, and other European nations. Between 2015 and 2023, India’s share of US pharmaceutical imports rose from 6% to 11%. In contrast, European suppliers have retained or expanded their shares, with Ireland now accounting for 28% and Germany 21%, according to Nuvama data.
India accounts for around 6% of the US’ total pharmaceutical imports, supplying both finished drugs and active pharmaceutical ingredients, the research firm had said. In 2023, the US imported approximately $170 billion worth of pharmaceutical goods, with India’s contribution at just under $10 billion.
The investigation in the US falls under Section 232 of the US Trade Expansion Act, which allows the government to determine whether specific imports threaten national security. This section has been previously used to impose tariffs on steel and aluminium.
The move — which followed an announcement by the Trump administration in the Federal Register on Monday, outlining plans to examine imports of pharmaceuticals, APIs, and derivative products alongside a parallel probe into semiconductors — marks a shift in US trade policy towards the pharmaceutical sector, which had largely been shielded from trade measures on humanitarian grounds.
That came after US President Donald Trump criticised the US pharmaceutical industry’s dependence on offshore production and signalled a tougher stance ahead.
Generic drugs form a significant portion of India’s exports to the US. These products are central to the US healthcare system, offering estimated annual savings of over $400 billion. While China remains a smaller player in this segment, with around $2 billion in exports to the US in 2023, any new tariffs could potentially shift supply chains or raise costs.
The impact on Indian companies could vary based on their exposure to the US market. Gland Pharma Ltd. and Aurobindo Pharma Ltd. derive about 50% of their revenues from the US, while Dr. Reddy’s Laboratories Ltd., Zydus Lifesciences Ltd., and Lupin Ltd. have 38-45% exposure respectively, according to Nuvama. Others, like Glenmark Pharmaceuticals Ltd., Sun Pharmaceutical Industries Ltd., Cipla Ltd., and Torrent Pharmaceuticals Ltd. also maintain a significant presence.
. Read more on Economy & Finance by NDTV Profit.Indian firms like Gland Pharma, Aurobindo Pharma, and Sun Pharma face increased risk as the US government evaluates security risks linked to drug import dependence. Read MoreEconomy & Finance, Global Economics, Business, Markets, Notifications
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