Indian pharmaceutical companies like contract development and manufacturing organisations (CDMOs) are expected to face no major disruptions from the proposed 10-25 per cent tariffs by the US, a report by B&K Securities revealed. The report said that despite growing concerns over new trade restrictions, Indian pharma service providers will continue to leverage global trends.
“The companies see only marginal impact and no major disruption to US business from the planned US tariffs (10-25 per cent)” the report stated.
America is a major market for Indian CDMOs, with annual exports estimated at $9-10 billion. Though the tariff proposal has sparked concerns, industry players believe that any potential cost increases can largely be passed on to end customers, minimising financial strain.
India continues to play a crucial role in the US generic drug supply chain, supplying key starting materials (KSMs), active pharmaceutical ingredients (APIs), and finished formulations. Indian firms account for around 40-45 per cent of the total generic drug volume in the US market.
“Export formulation players can majorly pass on any price impact from US tariffs to end customers. India caters to nearly approx. 40-45 per cent of the generic drug volumes in the US” the report added.
Furthermore, the growing trend of global pharmaceutical companies outsourcing production to Indian CDMOs as part of a China+1 diversification tactic. Factors such as a favourable USD/INR exchange rate and an increase in requests for quotations (RFQs) are further fueling growth in the sector.
Indian CDMOs are also making significant investments to expand their capabilities, particularly in specialised fields like Antibody-Drug Conjugates (ADCs), peptides (including GLP-1), Cell and Gene Therapy (CGT), CAR-T, and Biotech. These advancements position them to capitalise on emerging opportunities in the $180 billion global CDMO market.
Despite the uncertainties surrounding US trade policies, Indian pharma manufacturers are expected to strengthen their global presence through continued innovation, technological advancements, and production capacity expansion.
