Tariffs, costs, shifting strategies: Indian pharma's new playbook

In the pink of health

- SOHINI DAS

As the potential threat of a steep 200 percent tariff on pharmaceutical imports hangs in the air, analysts and industry insiders feel that focus on exports to non-US regions as well as the domestic market will increase as a long-term trend.

US President Donald Trump told CNBC's Squawk Box in the first week of August that planned tariffs on import of pharmaceutical products to the US could eventually reach up to 250 percent. According to AP, US administration officials have suggested duties of up to 200 percent on drugs as they invoked the national security provisions under Section 232 of the US Trade Expansion Act of 1962, arguing that America needs to boost domestic drug manufacturing.

India Ratings and Research (Ind-Ra) said they expect this exemption may be temporary due to changes in tariff policies and negotiations between several countries and the US government.

"Even with an exemption, India's pharmaceutical sector might face targeted tariffs if the US identifies trade or security reasons. The US generic market is crucial for India, contributing about 35 percent or $10.7 billion to its total revenue," said an analyst.