Impact of Tariffs on India’s Economy and Pharmaceutical Sector

Putting tariffs on pharmaceutical products will have a huge effect on India's economy and on its ability to compete in the global pharmaceutical business. More than 200 countries buy cheap generic drugs from India, which is often called the "Pharmacy of the World." India's GDP, job creation, and foreign exchange gains are all helped by this sector, which makes up about 6% of all merchandise exports. Rising global tariff hurdles and protectionist trade policies, on the other hand, create new problems for businesses and the economy. When taxes are raised on exported medicines or imported raw materials, especially Active Pharmaceutical Ingredients (APIs), they directly raise production costs and make India less competitive in global markets when it comes to prices. This changes both the amount of money India makes from exports and how profitable the business is, which in turn changes India's trade balance and its overall economic growth.

India's pharmaceutical environment is still weak because it depends too much on APIs that are brought in from other countries, mostly China. About 70% of India's big drug needs are met by imports. Any rise in tariffs or trade restrictions can disrupt manufacturing, raise drug costs, and limit access to medicines, putting India’s healthcare system and supply chain at risk. When it comes to exports, tariffs put in place by countries that buy goods, like the US or EU, can make it harder for Indian companies that control the global generic space to get to new markets. India exports more than USD 25 billion worth of pharmaceuticals every year, so even a small rise in tariffs can mean billions of dollars in lost revenue. This can hurt jobs, tax collections, and the economy's ability to bounce back.

Tariff confusion can also make foreign investors less likely to put money into India's pharmaceutical manufacturing and research and development (R&D) sectors. Investors stay away from places where trade isn't stable. As a result, India could lose its competitive edge if it doesn't improve its own production and achieve better trade terms. The Production Linked Incentive (PLI) Scheme and Make in India are two government programs that aim to make India more self-sufficient in making large drugs and lower the cost of tariffs. India needs to keep growing and protect its image as a reliable global medicine supplier by promoting new ideas, increasing the capacity of its own API factories, and expanding its export markets.

The Faculty of Pharmacy at SGT University, a prestigious private university in Delhi NCR, prepares students to address global pharmaceutical issues, such as trade tariffs and API dependence, in order to improve India's standing in the international medical market.