America Increased tariffs on pharma imports can have a serious impact on Indian drug manufacturers, as this will increase their production costs, making exports less competitive than products in other countries. Small pharmaceutical companies working on low margin may be severe pressure, forcing them to integrate or turn off the business. On the other hand, it is expected to have little impact on the auto sector, as America is a small export market. Describing India as a very high tariff country, US President Donald Trump has said that counter -tariffs on countries imposing tariffs on American goods will be applicable from April 2.
India imposes 10% tax
India currently imposes about 10 per cent of import duty on American medicines, while the US does not impose any import duty on Indian medicines. Arvind Sharma, a partner of Shardul Amarchand Mangaldas & Company, said that in recent history, the US has been a pure importer of drug products to meet its domestic demand. “If the US decides to impose heavy duty on drug imports from India, its effect will be clearly visible on the Indian drug sector and its domestic consumption will also be interrupted.”
Indian medicines are supplied on a large scale in America
Indian pharmaceutical companies do a large part of drug supply in the US. In the year 2022, in the US, 40 per cent of the leaflets written by doctors i.e. four out of 10 were supplied by Indian companies. According to industry sources, overall, the US healthcare system saved $ 219 billion from Indian companies’ drugs in 2022 and a total of $ 1,300 billion was saved between 2013 and 2022. Indian companies are expected to save an additional savings of $ 1,300 billion in the next five years from generic medicines.
America share in total exports about one-third
Sharma said that India’s pharmaceutical industry is currently dependent on the US market to a large extent and America is about one-third of its total exports. Sharma said that by imposing tariffs, the US can inadvertently increase its domestic healthcare cost, which will put a burden on consumers and in return will make access to healthcare rare.
Auto sector will not affect much
Explaining in detail about the auto sector, Industrual partner Shashi Mathews said that the recent announcements of the Trump administration will have little impact on the Indian vehicle sector. He said, “The reason for this is that even though entry into India is well preserved and thus can be imposed heavy tax, but the counter -tariff for imports in the US, which is a small export market for the Indian motor vehicle sector, will not affect us much.” He said that it may have some effect, especially vehicle equipment on the market. Matthews said that despite efforts to reduce tariffs to zero levels, there is little possibility that the Indian government will reduce tariffs in the near future to that level.
(With input from PTI/language)
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