Crores of patients in America, Europe, Africa and Asia are dependent on generic medicines.
There is a stir in the pharmaceutical market due to the latest threat from US President Donald Trump. After two years, he has announced 200 percent tariff on generic medicines. According to the announcement, no tariff will be imposed till the year 2028. After that, 100 percent tariff will be imposed for one year and 200 percent tariff after 2029 or 2030. Meaning, there is no crisis for two years. This also seems to be a pressure tactic. Because when the time comes to impose 200 percent tariff, Trump will no longer be President.Let us understand in the context of Trump’s latest announcement who is the real king of the generic drug market? India or China? What will be the impact of Trump’s threat?
Generic medicines are the backbone of the global health system. These are medicines with the same active ingredients as branded medicines, but their prices are lower. Crores of patients from America, Europe, Africa and Asia depend on them. Both India and China are big players in this market. But the strength of both is different. India is strong in terms of finished generic medicines. China is ahead in raw materials and chemicals making medicines. Therefore both have their own strengths. The matter goes beyond dependence.
Strength in the world of medicines manufactured in India
India is often called the Pharmacy of the World. The main reason for this is the huge production of cheap and reliable generic medicines. Indian companies make tablets, capsules, injections, syrups and many complex medicines and send them across the world. America is India’s largest foreign market. According to latest reports, India’s pharma exports to America in the year 2025 will be around $9.7 billion. This is about 38 percent of India’s total global pharmaceutical exports. Indian companies have a huge share in the generic drugs used in the American market.
According to an estimate it is around 47 percent. Indian companies have many plants and products approved by the US Food and Drug Administration. It is not easy to get this approval. The quality, records and production process are strictly scrutinized. Companies like Sun Pharma, Dr. Reddy’s, Cipla, Lupine, Aurobindo Pharma and Zydus have been present in the American market for a long time. Many of these companies also have production centers in America. This thing can become very important in future.
Raw material is the real strength of China
China is not as dominant as India in the market of finished generic drugs, but it has a very strong hold in the basic supply chain of the pharmaceutical industry. China is very strong in the active chemical elements required to make medicines. These elements are called active pharmaceutical ingredients. Many Indian pharmaceutical companies buy APIs and other chemical inputs from China. It is claimed in the reports that about 70 percent of India’s chemical API requirement is from China. This is China’s biggest strength.
India makes the last medicine. China provides many of its essential raw materials. If supply from China is disrupted, production costs in India may increase. Therefore, it would be incomplete to consider China as India’s only rival. In many ways, China is also a major supplier to the Indian pharmaceutical industry.
US President Donald Trump and Chinese President Xi Jinping,
Then who is the real king?
If the question is about ready generic medicine, then India’s lead is clearly visible. India can produce medicines in large quantities at low cost. Indian companies have access to markets with American and European regulations. Their filing, quality control and export networks are strong, but if the question is about the foundation of the pharmaceutical industry, then China has a bigger role. China’s capacity in API, chemicals and intermediate products is a strategic challenge for India. In simple language, India is ahead in manufacturing and selling medicines while China is strong in providing the necessary raw materials for medicines. India reaches the patient. China is sitting at the root of production. In this competition, India can be called the king of the finished medicine market, but it is not yet completely self-sufficient in its supply chain.
What will be the impact of Trump’s new tariff threat on India?
Trump’s threat will not have much immediate impact on India. Exports will continue for two years. After that the picture may change. Because the proposed tariff is very high. According to the American plan, there will be zero tariff on generic medicines for the next two years from August 1, 2026. After this, 100 percent fee will be charged for one year. Then it can be increased to 200 percent. The purpose of this proposal is to bring drug production within America. The US administration wants foreign companies to set up plants in America and produce there. This is a phased plan at present.
Trump’s threat will not have much immediate impact on India.
What effect will this threat have on China?
China may also be affected by this policy, but the impact of China will be different from that of India. China is more important in the supply of APIs and chemicals rather than finished medicines. If American companies increase drug production in America, they will also need API. In such a situation, China’s supply chain role may continue. Yes, both America and India can intensify efforts to reduce dependence on China.
Opportunities and challenges before India
- This is also an opportunity for India. India can create an alternative to raw materials coming from China by increasing API production. This will strengthen the domestic industry. India should not spend the next two years just waiting. He will have to work fast on many fronts.
- First: Production and packaging capacity in America will have to be increased.
- Second: Dependence on China for APIs will have to be reduced.
- Third: New markets will have to be expanded in Europe, Africa, Latin America and Asia.
- Fourth: Attention will have to be paid to high value products like complex generic drugs and biosimilars.
India’s strength is low cost and large production capacity, but cheap medicine alone will not be enough in the future. Strength of supply chain, self-reliance in raw materials and access to new markets will also be necessary.
In simple words, India dominates the ready market of generic medicines. China is strong in supply of raw materials. Therefore, the real king of this industry is India right now, but under its throne there is also the support of China’s supply chain. Trump’s tariff threat is not an immediate crisis for India. Two years’ time is a big relief. But if 100 and 200 percent tariffs are implemented, Indian companies will have to make a new strategy for the American market.
Also read: Protest at Jantar Mantar…where does the force come from to stop the demonstration?
