New Delhi. Increased duty on pharma imports in the US may have a serious impact on Indian pharmaceutical manufacturers as this will increase their production costs, making exports less competitive than products in other countries. Small pharmaceutical companies working on low margin may be severe pressure, forcing them to integrate or turn off the business. On the other hand, it is expected to have little impact on the vehicle sector, as the US is a small export market.
Describing India as a country with a high fee, US President Donald Trump has said that retaliation on countries levying US goods will be applicable from April 2. India currently imposes about 10 percent import duty on American drugs, while the US does not impose any import duty on Indian medicines. Arvind Sharma, a partner of Shardul Amarchand Mangaldas & Company, said that in recent history, the US has been a pure importer of drug products to meet its domestic demand.
He said, “If the US decides to impose heavy duty on drug imports from India, its impact will be clearly visible on the Indian pharmaceutical sector and its domestic consumption will also be interrupted.” Indian pharmaceutical companies do a large part of the drug supply in the US. In the year 2022, in the US, 40 percent of the leaflets written by doctors, ie four out of 10, were supplied by Indian companies. According to industry sources, overall, the US healthcare system saved $ 219 billion from Indian companies’ drugs in 2022 and a total of $ 1,300 billion was saved between 2013 and 2022.
Indian companies are expected to save an additional savings of $ 1,300 billion in the next five years from generic medicines. Sharma said that India’s pharmaceutical industry is currently largely dependent on the US market, and the US is about one-third of its total exports. Sharma said that by imposing a fee, the US can inadvertently increase its domestic health care costs, which will put a burden on consumers and in return will make access to health care. Explaining in detail about the vehicle sector, Industrual partner Shashi Mathews said that the recent announcements of the Trump administration will have little impact on the Indian vehicle sector.
He said, “The reason for this is that even though entry into India is well preserved and thus can be imposed heavy tax, but the counter -duty for imports in the US, which is a small export market for the Indian motor vehicle sector, will not affect us much.” He said that it may have some effect, especially vehicle equipment on the market. Mathews said that despite efforts to reduce the fee to zero level, there is little possibility that the Indian government will reduce the fee in the near future to that level.