Overview: US Tax Policy and Indian Pharma
The Trump administration’s second term has been marked by a push toward protectionist tax measures, tariffs, and tighter control on foreign-based operations. In this context, India’s booming pharmaceutical industry—an ecosystem where the United States represents a major, sometimes dominant market—faces questions about how new fiscal rules might reshape costs, pricing, and supply chains. According to Rajeev Nannapaneni, CEO and Managing Director of Nadko Pharma, the immediate fear is not an end to trade but the recalibration of costs and competitiveness for Indian-made medicines in the U.S. and beyond.
US tariff moves and what they could mean for Indian pharma
Reports from Washington have highlighted proposals that would impose 100% tariffs on medicines imported from abroad, even as the administration promises tax relief or exemptions for U.S.-based pharmaceutical companies. The broader context includes earlier steps such as tariff rhetoric tied to energy imports and a stern stance on visa policies, including H1B visa fees now discussed at substantial levels. While these measures may seem aimed at rebalancing domestic production, Indian manufacturers wonder how such tariffs, if enacted, would play out in practice.
In a candid interview, Nannapaneni notes that the Indian pharmaceutical sector’s exposure to the U.S. market is complex. “When you compare trade tariffs, the impact on the pharma sector is relatively modest,” he says, adding that the vast majority of Indian-made medicines are aimed at global demand, with the United States as a crucial but not sole destination. He points out that even if duties rise, the underlying economics of US drug prices, manufacturing costs, and supply reliability will determine how significant the burden becomes for Indian suppliers.
Why the impact might be manageable for India
One of the most salient factors is the global supply chain’s current footprint. India supplies a large share of active pharmaceutical ingredients (APIs) and finished formulations to markets around the world, including the United States. Nannapaneni explains: “The core inputs for medicines—APIs and intermediates—are largely sourced from India and China. If tariffs spike, the European, African, and other markets could absorb some of the shifts, but the US remains a major, non-negotiable destination for Indian firms due to scale and compatibility of products.”
He adds that the 100% tariff proposal, if implemented, could initially raise prices for some medicines in the U.S. market and complicate the cost structure for import-dependent buyers. Yet, the industry’s resilience lies in diversification and efficiency gains. “The future tariffs are unpredictable,” he notes, “but the current situation is favorable for India, which already enjoys a large, established US demand base.”
India-US trade strategy in a shifting policy landscape
According to Nannapaneni, exiting the U.S. market is neither practical nor desirable for most Indian pharma players. The U.S. is one of the largest customers for Indian medicines, and many firms have built their R&D and regulatory footprints to serve it efficiently. Therefore, the strategy is not withdrawal but fortification—reducing vulnerabilities by diversifying supply chains, investing in domestic manufacturing capabilities, and pursuing regulatory harmonization that can ease cross-border trade.
He observes that Indian firms are increasingly looking to expand manufacturing and investment beyond traditional hubs. While India remains the global backbone for affordable medicines, the long-term picture includes expanding capacities in other regions to balance risk and leverage new growth avenues. The goal is to sustain price competitiveness and ensure secure, uninterrupted access to medicines for patients in the U.S. and elsewhere.
Outlook: diversification, investment, and a global footprint
Beyond policy shifts, Nannapaneni stresses the importance of strategic diversification. India’s pharma industry is at a crossroads where enhancing local production, adopting advanced manufacturing technologies, and investing abroad can help weather tariff volatility. He notes that his own investment strategy—already active in other continents—reflects this broader vision of resilience through geographic and product diversification.
“The world is moving toward more self-reliant production models,” he says, echoing a growing trend among nations aiming to produce core medicines domestically. For Nadko Pharma and many Indian peers, the path forward combines competitive manufacturing, smart global partnerships, and a vigilant eye on policy developments in the United States and other key markets.
Bottom line
While US tax moves and tariff talk create uncertainty, the Indian pharma sector’s scale, manufacturing prowess, and diverse export markets suggest a measured, adaptive response is possible. With India continuing to strengthen its regulatory and manufacturing ecosystems, the industry believes it can sustain its important role in global health without surrendering market access to the United States.
About Nadko Pharma
Nadko Pharma is one of India’s leading pharmaceutical companies, known for its extensive portfolio of generics and formulations. The company emphasizes global reach, quality, and affordable medicines as it navigates evolving trade and tax landscapes.
