India, US plan reciprocal deal on medical devices for generics: report

Washington has nudged Indian negotiators to scrap import duties on American medical devices, while India, which is negotiating a bilateral trade agreement, may reciprocate if the US removes the tariff barrier on pharmaceutical products including generic medicines, the Hindustan Times reported, citing people familiar with the matter.

US negotiators have raised an issue related to duties on exports of their pharma products and medical devices in the Indian market.

India exported drugs and pharmaceuticals worth $27.85 billion in fiscal 2024, about 10% higher than the previous year.

In FY25, pharma exports to the US crossed $27 billion in the first 11 months at 7% annualized growth.

Out of the total pharmaceutical exports from India, 30% go to the US.

While the US charges no duty on most pharmaceuticals, American drugs attract up to a 10% tariff in India.

The US has kept the pharmaceutical sector out of its reciprocal tariffs, but US President Donald Trump announced his intention to impose tariffs on pharmaceutical products.

Even if the US imposes a duty on Indian pharmaceutical products, the impact could be temporary as it is a significant component of the BTA, which is likely to be finalized by the July-September quarter, analysts said.

Considering the uncertainty, Indian pharma firms have been asked to diversify their exports to countries other than the US.

US negotiators have complained about duplicative testing certification requirements in sectors such as chemicals, telecom products, and medical devices.

If these barriers are removed, US exports are estimated to surge by $5.3 billion, as indicated by the fact sheet presented by the Trump administration.

The Indian pharmaceutical industry is the third largest in the world by volume and the 14th largest by volume, according to some government estimates.

The total annual revenue of pharma was ₹4.17 trillion for fiscal 2024 and has grown at an average 10.08% in the past five years. In FY24, the value of pharma exported was ₹2.19 trillion, while imports were ₹58,440 crore.

In addition, India is the largest supplier of generic drugs, accounting for 20% of the global supply. India manufactures 60,000 generic brands across 60 therapeutic categories.