Impact of New US Tariff on Indian Pharmaceutical Giants
The US has imposed a 100% tariff on branded and patented pharmaceuticals imported from India. Sun Pharma is notably affected, with limited earnings impact. Generic drugs remain unaffected. Sun Pharma might consider shifting manufacturing to the US to offset tariff implications.
- Country:
- India
The recent imposition of a 100 percent tariff by the United States on imports of branded and patented pharmaceutical products may not considerably impact Indian drug manufacturers. Analysts highlight Sun Pharma as facing some risk but with minimal financial consequences.
Sun Pharma stands as the primary Indian company with substantial US sales in patented drugs, nearly 17 percent of its projected 2024-25 revenue. The US government's tariff excludes companies building manufacturing facilities domestically, which offers some respite for affected firms. Indian exports to the US overwhelmingly consist of generic medicines, exempt from the tariff.
Experts suggest that while some revenue from proprietary medications by domestic companies may be modest, the essential nature of these drugs means costs could largely pass through. Options for Sun Pharma include leveraging its existing facilities in the US or acquiring new ones to avert tariff penalties. Adapting to these changes would demand significant time and resources, the company noted.
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