Baddi industrial hub worried as 50% US tariff hits Indian trade

Investors in the state’s Baddi-Barotiwala-Nalagarh (BBN) industrial hub are keeping a keen watch over the US after it imposed a 50 per cent tariff on various gods, including textiles, exported from India.

The BBN houses numerous spinning mills, weaving units, manufacturing and ancillary units. A majority of them have been operating for the last several decades. The sector got a boost after the 2003 central industrial package.

Key textile firms with Vardhman, Winsome and Indo Rama have their manufacturing facilities here. “Since they import their goods to countries like Sri Lanka, Indonesia and those in the European Union, etc., the US tariff has not impacted their trade,” said a senior official of the Industries Department.

Apart from this, it is the pharmaceutical hub housing more than 350 manufacturing units.

“The state has about 150 pharmaceutical units that have US Food and Drug Administration approvals. Since the manufacturing facility is approved by the US officials, they can’t raise fingers on the products,” said a pharmaceutical manufacturer.

He said, “With the Indian generic products being at least 20 per cent cheaper, the US cannot afford to impose tariff on pharma products as it will cripple their own economy. As much as 47 per cent of the generics consumed by the US are imported from India and we play a key role in providing affordable medicines to them.”

Though the pharma sector has been exempt from the US tariff till now as it will raise costs for their own consumers, the investors were keenly watching the developments. The sector is currently under review as part of the Section 232 investigation under the Trade Expansion Act of 1962 that allows the US President to impose trade restrictions such as tariffs. It is reviewing the national security implications of pharmaceutical and pharmaceutical ingredient imports.

With the US showing little signs of easing tariff, the industry was anxiously watching steps taken by the Indian government to wriggle out of this uneasy scenario. The state has exported pharma export worth Rs 10,000 crore (roughly $1.2 billion) in 2023. Himachal is acclaimed as the largest pharmaceutical export zone in Asia.