Pharma Tariff May Not Hit Hyd Drug Firms

HYDERABAD: Even as Donald Trump dashed off a missive announcing 100 per cent tariffs on branded, patented pharma products, Hyderabad, which has a significant number of pharma companies exporting to the US, may not see an impact, said industry officials.

“The announcement is vague. The use of terms branded and patent in the message leaves scope for varied interpretation. India is predominantly a generic exporter and I don’t think it impacts Hyderabad or even India,” said R Udaya Bhasker, former director general of Pharmaceuticals Export Promotion Council of India, a commerce ministry wing headquartered in Hyderabad.

“Generics cannot be seen as branded or patented products. We need more clarity to assess the impact, if any,” he said. Starting October 1, the US will be imposing a 100 per cent tariff on any branded or patented pharmaceutical product, unless the company is building its pharma manufacturing plant in America. There will be no tariff on these pharma products if construction has started, Trump had said.

The US is India’s largest export market for Indian-manufactured generics. The US accounts for 31.3 per cent of India’ s total pharma exports. Nearly half (47 per cent) of all generics used in the US are imported from India.

“Longer term concerns and public interest are at stake. India matters in the supply of affordable essential medicines to the world. There is a need for pushing Indian generics as a global public good,” he said.

Telangana is home to 694 pharma companies as of March 2025, as per officials. Affordable generic medicines exported from India constitute over 90 per cent of the prescriptions filled in the US for diabetes, anxiety, depression and cancer. Indian generic medicines saved the US healthcare system about $220 billion in 2022 and nearly $1.3 trillion between 2013 and 2022, the former DG said.

West Asia, Central Asia, Africa and South America are growing markets for the Indian generics. India needs to diversify pharmaceutical trade and investment. Indian generics as global public good India can build bridges with Africa, South America, Central Asia, Russia, China, ASEAN members and benefit the world majority, he said.

The Trump administration’s push for domestic pharmaceutical production has already benefited from a surge of investments from India-based companies aiming to enhance their US manufacturing. “Not to the surprise of many, the Trump administration has imposed a 100 per cent tariff on the pharma products being imported. This tariff is applicable to branded and patented drugs. The White House is yet to define the scope of these terms. That will help us understand the impact. As ofnow, I feel there will be no impact to firms from Hyderabad,” said K Koteswara Rao, convenor, All India Forum for Small and Medium Enterprises.

“The move will hurt the American healthcare system more than the Indian economy,” he said, adding that the exports to the US markets are shielded as generic and big players have their plants set up in the US. “The Indian industry may have to re-route the exports through European countries. The dent on pharma exports may be invisible now,” he said.