New Delhi, April 4: The Commerce Ministry is in active talks with Indian pharmaceutical exporters amid growing concerns over possible US tariffs on the sector, which was exempted in the first tranche of reciprocal tariffs by US President Donald Trump.
The discussions between the government and pharma exporters began after Trump hinted at imposing “never-seen-before” tariffs on pharmaceutical imports (Thursday, US time). While marginal tariffs may not cause much disruption, steep duties could hurt the profit margins of Indian drugmakers.
The United States is a key market for India’s pharmaceutical exports, with India supplying around 40 per cent of all generic drugs used in the US. Indian pharmaceutical exports to the US are worth nearly $9 billion annually. Any sharp increase in tariffs could not only affect Indian exporters but may also have a direct impact on American consumers, according to a report by NDTV Profit on Friday.
Trump has introduced a new wave of tariffs targeting multiple sectors. These include a 25 per cent tariff on all imported cars and light-duty trucks, and a 10 per cent minimum tariff on other imported goods.
India has been hit with a compound reciprocal tariff rate of 27 per cent. The government is reportedly assessing the situation closely and is working with exporters to understand the potential impact and explore ways to mitigate risks, the report mentioned.
The latest Trump statement has left Indian pharma firms worried, many of which rely heavily on the US market for business. The stocks of Indian pharmaceutical companies were trading significantly lower during the day. Shares of Aurobindo Pharma, Laurus Labs, IPCA Laboratories, and Lupin fell by up to 8 per cent on the National Stock Exchange (NSE) in the intra-day trading.
In the previous trading session on April 3, shares of domestic pharmaceutical companies gained some relief, even as other sectors faced heavy selling pressure. This came after the White House excluded pharmaceutical products from the reciprocal tariffs.
IANS