BRS MP Parthasaradhi Reddy voices concern over US reciprocal tariff on Indian pharma exports
Warns that Indian pharmaceutical products could become more expensive in the US, reducing their competitiveness in one of the world's largest markets
New Delhi: BRS member of Rajya Sabha B Parthasaradhi Reddy has voiced concern over the severe threat posed to the Indian pharmaceutical industry by the proposed reciprocal tariffs by the United States. This proposed tariff could adversely affect one of India’s most significant economic sectors, with potential repercussions for millions of jobs and the country’s vital foreign exchange earnings.
Speaking in the Rajya Sabha on Wednesday highlighted that the United States accounted for over 31 per cent of the country’s total pharmaceutical exports, with the value of Indian pharma exports to the US reaching $9 billion (approximately ₹74,000 crores) in 2023-24. The US was the largest importer of Indian pharmaceutical products and any reciprocal tariff imposed by the US would significantly disrupt this thriving trade.
Impact on the Indian pharmaceutical industry
The BRS MP raised alarm about the potential economic impact of such tariffs. He warned that Indian pharmaceutical products could become more expensive in the US, reducing their competitiveness in one of the world’s largest markets. The resultant rise in prices could lead to a loss of market share for Indian pharma companies, particularly for generic medicines, which are priced at lower costs. This could lead to reduced profit margins, making many investments unviable.
Reddy further emphasised that the Indian pharmaceutical sector contributed significantly to the country’s GDP and foreign exchange earnings. Any disruption in the exports of pharmaceutical products could lead to a decline in foreign exchange revenues and cause potential job losses in manufacturing, research, distribution, and other sectors tied to the pharmaceutical industry.
He urged the Government of India to treat the issue with utmost urgency and implement remedial measures to safeguard the interests of the Indian pharmaceutical industry. He proposed that the Indian government engage in diplomatic talks with the United States to resolve the issue amicably. India must highlight the vital role of pharmaceutical exports to the US and explain the consequences such as increased medicine prices and the potential shortage of life-saving drugs for patients in both countries.
He suggested that India ought to prioritise pursuing a Free Trade Agreement with the US, specifically addressing pharmaceutical tariffs. Additionally, the US-India Trade Policy Forum must be reviewed and strengthened to ensure effective resolution of trade issues, including tariffs on pharmaceutical products. The BRS MP called for providing financial support to Indian pharma companies through special incentives, subsidies, tax breaks, and other measures that could help them mitigate the impact of US tariffs and maintain their global competitiveness.
Elaborating on various aspects of the issue, Reddy argued that the Indian pharmaceutical companies must be encouraged to adopt new strategies such as automation, cost optimisation, and an enhanced focus on research and development (R&D). The government should extend special financial support for R&D initiatives to help develop new technologies and innovative molecules, enabling Indian pharma companies to compete globally.
He urged the government to act decisively to protect the interests of the pharmaceutical sector, which has earned India the title of the “pharmacy of the world.” Immediate government intervention, through both diplomatic and domestic support measures, is crucial to shield the industry from the potentially devastating impact of the US reciprocal tariff proposal.
The Indian pharmaceutical industry is vital not only to the nation’s economy but also to global healthcare. Safeguarding its future will ensure that India continues to play a pivotal role in supplying affordable, life-saving medicines worldwide, he added.
