Donald Trump Reciprocal Tariff: US President Donald Trump has proposed to put tariffs on imported medicines, causing a stir in the Indian pharma sector. India is the largest supplier of generic drugs in America and this step can directly affect the profits of many companies.

What is the whole matter?

In fact, the US currently imposes zero tariffs on Indian medicines, while India charges about 5 to 10 percent on American medicines. Trump wants America to put as much tariff as India. That is, America will also impose a tariff of up to 10 percent on products of Indian pharmaceutical companies from April 2. Although this tariff is more focused on Ireland and China, Indian companies can also be affected by it.

Which companies threatened the most?

According to brokerage firm Jefferies, generic drug -making companies and contract manufacturers (CMOS) are the highest risk. In this, Zaidus LifeSians, whose total sales are 45 percent of the sales from the US at risk. Let me tell you, the market share of its oral medicines in America is quite big. Apart from this, Dr. Reddy’s Laboratories (43 per cent of US sales), Gland Pharma (54 per cent to Sales) and Biocon (50 per cent from USA) are also in danger list. That is, the reciperook tariff will see a direct impact on the profits of these pharma companies.

Apart from this, it will also have an impact on companies such as lupine (35 per cent of US sales), Sun Pharma (30 per cent of US sales) and Cipla (28 per cent to Sales), but will be slightly lower than companies above.

Will Indian companies be able to face tariffs?

According to The Mint’s report, if the tariff is imposed, companies will try to put a cost on American distributors or insurance companies. But the pricing pressure is high in the generic market, so margin may affect. Starting manufacturing in America is a long process of 5-6 years, which will cost heavy.

What will happen next?

Brokerage firm Jefferies believes that even if the tariff is imposed, it will not be more than 10 percent. Apart from this, Trump’s focus is on Ireland and China, so the generic sector may get discounts. 90 percent of the prescriptions in the US are of generic drugs, so common American citizens will be affected by tariffs.

Also read: Moody’s Report: India gets its iron, the fastest growth rate in G-20 countries, Moody’s released figures

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