Pharma sector stays under the radar in relief for India; may blip later

India's pharmaceuticals sector, among the domestic industries most dependent on trade with the US, for now appears to have dodged the heavy reciprocal tariffs US President Donald Trump announced on 2 April.

- Jessica Jani

Pharmaceuticals, among other products, won't be subject to the reciprocal tariffs, according to a White House fact sheet issued shortly after the US President's address.

The US is India's largest export market for pharmaceutical goods, so the exemption brings huge relief to Indian pharma companies, which supply more than 45% of generics and 15% of biosimilars used in the US.

Companies such as Aurobindo Pharma, Dr Reddy's, Zydus Lifesciences, Gland Pharma and Sun Pharma earn 30-50% of their total revenues from the US.

The industry had been hopeful of an exemption in the lead-up to Wednesday's announcement.

However, this does not mean pharma tariffs are off the table.

Pharma firms "will come roaring back", Trump said in his speech on Wednesday, referring to big pharma increasing its manufacturing in the US.

"We're going to produce the medicines that we need right here in America," he said.

Pharma giants such as Johnson & Johnson and Eli Lilly recently announced investments of $55 billion and $27 billion, respectively, for domestic manufacturing in the US.