US Reciprocal Tariff on Indian Pharma Exports: MP Parthasaradhi Reddy Raises Concern in Parliament

Rajya Sabha MP B Parthasaradhi Reddy raised a pressing concern in Parliament yesterday (March 26), highlighting the severe risk posed to India’s pharmaceutical sector by the United States' proposed reciprocal tariffs. He warned that these tariffs could significantly impact one of India’s most crucial industries, jeopardizing millions of jobs and the country’s foreign exchange earnings.

Parthasaradhi Reddy underscored the vital role of the US in India’s pharmaceutical trade, noting that it accounts for over 31% of India’s total pharma exports. In 2023-24 alone, Indian pharmaceutical exports to the US were valued at $9 billion (approximately ₹74,000 crores). As the largest importer of Indian pharmaceutical products, any trade barriers imposed by the US could severely disrupt this sector.

The MP warned that higher tariffs would increase the cost of Indian medicines in the US, making them less competitive in the global market. This would particularly affect the generic drug segment, where Indian firms play a dominant role by supplying affordable medicines. A loss of market share and reduced profit margins could render many pharmaceutical investments unviable, leading to economic repercussions.

The Indian pharmaceutical industry is a cornerstone of the national economy, contributing significantly to GDP and foreign exchange reserves. Shri Reddy cautioned that disruptions in pharma exports could lead to job losses across manufacturing, research, and distribution. Additionally, reduced foreign exchange inflows would negatively impact India’s economic stability.

As a scientist and industry expert, Parthasaradhi Reddy urged the Indian government to take immediate action to safeguard the pharmaceutical sector. He outlined key measures:

The Indian government must initiate high-level diplomatic discussions with the US to resolve the issue amicably.

India should emphasize the global importance of its pharmaceutical exports, highlighting the risk of increased drug prices and potential shortages for American patients.

India should push for an FTA with the US, specifically addressing pharmaceutical trade barriers.

The US-India Trade Policy Forum should be strengthened to effectively resolve tariff disputes and protect Indian exports.

The government should introduce special incentives, tax breaks, and subsidies to help Indian pharmaceutical companies offset the impact of US tariffs.

Support mechanisms should be designed to ensure continued global competitiveness.

Indian pharma firms should be encouraged to invest in automation, cost optimization, and research & development (R&D).

The government must extend financial aid for R&D to promote innovation in drug development and new technologies, ensuring sustained global leadership.

B Parthasaradhi Reddy urged the Indian government to act swiftly to protect the pharmaceutical sector, often referred to as the “pharmacy of the world.” He emphasized that immediate intervention—both diplomatic and domestic—is essential to shield the industry from the adverse effects of US trade policies.

India’s pharmaceutical industry is not just a national economic driver but a crucial pillar of global healthcare. Safeguarding its future will ensure continued access to affordable, life-saving medicines for millions worldwide.