Vadodara: US President Donald Trump’s latest announcement of a 100% tariff on branded pharmaceuticals has left Gujarat’s Rs.10,000 crore pharma industry jittery, even though the tariff usually doesn’t apply to them.
India exports nearly 30% of its pharmaceuticals to the US, but most of them are life saving generic medicines– copies of branded drugs that offer the same efficacy at a fraction of the cost of branded drugs. Donald Trump’s post on Truth Social has said the tariff is for ‘branded or patented’ pharmaceutical products, which does not include generics, but there is still no clarity on this announcement, as branded generic products straddle the bridge between cheap generics and branded pharmaceutical products.
According to Bharat Desai, the President of Vadodara Pharmaceutical Manufacturers Association, almost $4 billion worth of pharmaceuticals are exported to the US from Gujarat, including the pharma hubs at Vadodara and Central Gujarat. Most of them are generics, but manufacturers of branded generics and biosimilars- variants of generics with similar results but differing ingredients- aren’t sure whether this tariff applies to them.
“India supplies over 45% of the generics used in USA, and 15% of biosimilars used. Data shows that India exported $8.7 billion (Rs 77,231 crore) worth of pharmaceutical products to the US in 2024. Moreover, in the first half of this year, India has already exported $3.7 billion (Rs 32,505 crore) to the US. While there is uncertainty still on future tariff plans w.r.t. complex generics, currently they are not under the purview of the tariffs to be imposed as bulk of them are generics.” Arushi Jain, Director of Akums Drugs and Pharmaceuticals, explained.
Experts say that almost 80% of the medicines exported from India are generics, but if the 100% tariff includes branded generics as well, then it can affect India’s exports to the US. They say that if the US imposes a 100% tariff on all medicines exported from India, America will need atleast 8-10 years to find an alternative for its requirement of cheap medicines. Currently, branded medicines sold in America are at least four times the price of generics, and America isn’t capable of finding an alternative in the near term.
There is a silver lining here, as Trump’s post stated that the tariffs will apply to only those companies that don’t have or are not building a manufacturing plant in the US. Most of the leading pharma companies in India- Dr Reddy’s, Aurobindo Pharma, etc, do have manufacturing plants in the US. For now, everyone is waiting for some clarity on this announcement.
