Any tariff on pharma will hit India, as 40% of its exports go to US: SBI Analysis

Imposing tariffs on the pharmaceutical Business will considerably affect the earnings of Indian pharma firms, as practically 40 per cent of India’s complete pharma exports are directed to the US market, in keeping with a report by SBI Analysis.

The report highlighted that if the US President imposes 50 per cent tariffs on Indian pharma exports as effectively, the earnings of pharmaceutical firms could decline by 5 to 10 per cent in FY26.

It is because many giant Indian pharma firms derive between 40 – 50 per cent of their complete income from the US market.

SBI said “a doable tariff of fifty per cent on pharma exports could hit earnings of pharma firms by 5 per cent- 10 per cent in FY26, as many large pharma firms’ revenues from US stood within the vary of 40-50 per cent”. 

In FY25, round 40 per cent of India’s pharmaceutical exports have been directed to the USA. India’s share within the US’s complete pharma imports stood at 6 per cent in 2024. 

A doable tariff of fifty per cent on pharma exports may even scale back the competitiveness of Indian merchandise on the planet’s largest pharmaceutical market and create strain on revenue margins, as firms could also be unable to go on increased prices to customers. 

The report famous that India has been a cornerstone of the worldwide provide chain for reasonably priced, high-quality medicines, significantly life-saving oncology medicine, antibiotics, and coverings for continual ailments. 

Within the generic drug market, India provides practically 35 per cent of the US’s pharmaceutical necessities.If the US have been to shift manufacturing and energetic pharmaceutical ingredient (API) manufacturing to different nations or home services, the transition would take a minimal of three to 5 years to realize significant capability, the report added. 

Generic medicine account for 90 per cent of prescriptions distributed within the US however symbolize solely 26 per cent of complete drug spending as of 2018. The report additionally identified that well being expenditure per individual per 12 months within the US is round USD 15,000, and with India’s 35 per cent share in generic drug provides, any tariff is prone to have a big affect on US residents by growing drugs prices.