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New Delhi:The exclusion of pharmaceuticals from the reciprocal tariffs imposed by the U.S. has provided relief to Indian drug manufacturers, as the U.S. constitutes their largest market, accounting for 31.3% of total exports in 2024. However, the medical device industry in India is likely to be significantly impacted.
A 26% tariff on medical devices imported from India marks a sharp escalation from previous tariffs, which historically ranged between 0 and 6%. This is also higher than the tariffs charged on medical devices imported by India from the U.S., which have historically ranged between 0 and 7.5%.
India’s medical device exports to the U.S. are less than half the value of its imports. India exported medical devices worth $714.3 million to the U.S. while importing $1519 million worth of medical devices.
The tariff leaves a small margin for the Indian industry and its competitors, such as China. The tariff imposed on Chinese imports is 34%, which is only eight percentage points higher than India.
Concerns exist that competitors may route their products through countries with lower tariffs, such as the UK or UAE. Non-tariff barriers also remain in place, such as the high costs of U.S. FDA approval, which range from $9,280 to over $540,000.
Polyethylene bags are the most common export to the U.S. Top exports from India to the U.S. include catheters, artificial joints, surgical knives, spectacle lenses, MRI machines, ECG machines, endoscopes, and X-ray tubes. Imports from the U.S. include MRI machines, CT machines, artificial joints, gas analysis apparatus, mass spectrometers, and orthopedic appliances.
Indian companies supply 47% of all generic medicines prescribed in the U.S. Medicines from Indian companies provided $219 billion in savings to the U.S. healthcare system in 2022. India exported pharmaceuticals worth $8.7 billion.
Disclaimer:This article is based on information from Indian Express. All information is intended for general knowledge and awareness and does not constitute professional advice.
Citations:
[1] https://indianexpress.com/article/health-wellness/us-trump-tariffs-medical-device-india-decoding-ripple-effect-9922718/
