US Excludes Pharma Sector from Immediate Tariff Imposition Amidst Trump's Executive Order.

The Indian Pharmaceutical Alliance welcomes the US administration's decision to exclude the pharma sector from immediate tariff imposition, citing the importance of affordable healthcare in the US. The sector operates on thin margins and is crucial for patient care. The US imposed a 25% tariff on Indian goods, citing national security and foreign policy concerns. The Indian government termed the move "unfair, unjustified, and unreasonable" and vowed to protect its national interests.

The US administration has imposed a 25% tariff on Indian goods, citing national security and foreign policy concerns. The decision, which comes into effect on August 1, is part of a broader effort to address Russia's activities in Ukraine. Notably, the pharmaceutical sector has been excluded from immediate tariff imposition, highlighting its importance for affordable healthcare in the US.

The Indian government has termed the move "unfair, unjustified, and unreasonable," vowing to protect its national interests. The additional tariff, which will bring the total tariff on Indian imports to the US to 50%, is expected to significantly impact various sectors, including textiles, gems and jewellery, auto parts, and seafood. Electronics and pharmaceuticals remain exempt for now.

The Indian Pharmaceutical Alliance has welcomed the exclusion of the pharma sector, stating that the industry operates on thin margins and is crucial for patient care. The alliance underscores the importance of affordable healthcare in the US, which heavily relies on Indian pharmaceuticals, with about 50% of generic drugs sourced from India [1].

The tariffs are expected to make Indian goods far costlier in the US, potentially cutting US-bound exports by 40–50% [2]. The Federation of India Exports Organisations has called the decision "extremely shocking," adding that it will hit 55% of India's exports to America.

The US administration has warned of potential penalties against other countries found to be "directly or indirectly" supporting Russia's war efforts. This includes countries that purchase Russian oil. The threatened tariff hike follows meetings by Trump's top envoy Steve Witkoff in Moscow, aimed at securing peace between Russia and Ukraine.

India has previously criticized the US for introducing levies while still engaging in trade with Russia. The latest move by the US administration demonstrates its willingness to impose sanctions related to the war in Ukraine even against nations considered to be important allies or trading partners.

The Indian government and manufacturers are expected to work to improve India's competitiveness to offset the 6% disadvantage over Indonesian and Vietnamese competitors. The US administration has stated that a balanced and stable trade deal will be key to protecting long-term interests in the sector.

References:
[1] https://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/healthcare-costs-in-us-to-shoot-up-following-trump-tariff-on-indian-goods-industry-experts/articleshow/123026740.cms
[2] https://www.bbc.com/news/articles/c1dxr1g4y7yo