Indian drugmakers likely to be hit as Trump plans 25% import tariffs

US President Donald Trump said on Tuesday he intends to impose a “25 per cent or higher” levies on semiconductors and pharmaceutical imports, and raise it substantially over the course of a year, a move likely to hit India’s sprawling pharmaceutical industry.

Most Indian generic drugmakers count the US as their largest market, with exports reaching $8.7 billion in fiscal 2024, or about 31 per cent of the industry’s overall exports, according to the government-backed trade body Pharmaceuticals Export Promotion Council of India (Pharmexcil).

India’s drugmakers export generic drugs to the US, offering a cost-effective alternate to expensive innovative drugs.

Nearly half of all generic prescriptions filled in the US in 2022 were supplied by Indian drugmakers and generated $408 billion in savings for the US healthcare system for the year, according to research firm IQVIA.

India’s largest drugmaker— Sun Pharmaceutical—had 32 per cent of its total revenue come from the US market in fiscal 2024. Sun’s MD Dilip Shanghvi said earlier this week that the extra tariffs, if imposed, will be passed on to consumers. It exports to 100 countries and overseas sales accounted to 72.7 per cent of the company’s total revenue .

North America is the largest market for Dr Reddy’s Laboratories, contributing 47 per cent of its total sales in fiscal 2024.

Cipla, which is India’s third-largest drugmaker by revenue generated 30 per cent of its total revenue from North America in fiscal 2024, is among the top 15 players in the US providing prescription drugs and supplies generic respiratory and oncology medicines.

Biocon earned 44 per cent of its total revenue from the US, its largest market for the year ended March 2024, primarily driven by demand for its biosimilars.

In 2022, Indian companies supplied 15 per cent of the volume of biosimilars in the US, according to IQVIA.

Lupin’s sales in North America contributed to 37 per cent of overall fiscal 2024 sales, up 30 per cent from the previous year thanks to solid demand for the company’s respiratory, antiretroviral generic drugs.

Glenmark Pharma generated 26 per cent of its revenue from North America in fiscal 2024. The company is focusing on expanding its respiratory drug portfolio offerings.

US is the largest market for Zydus, generating 46 per cent of its total revenue in 2024.