The interim trade deal has maintained a status quo on the India’s pharma exports to the US which means that the Indian generic exports will continue to attract zero duty from the US. Additionally, the joint statement said that India will receive “negotiated outcomes” from the findings of the US Section 232 investigation.
“Contingent on the findings of the U.S. Section 232 investigation of pharmaceuticals and pharmaceutical ingredients, India will receive negotiated outcomes with respect to generic pharmaceuticals and ingredients,” the joint statement said.
National Security Probe
In April last year, the US department of commerce started a probe under Section 242 to check if the pharma imports is threatening the national security. The investigation covered finished formulations, active pharmaceutical ingredients (APIs), medical devices and intermediates. The investigation ended in December but the final decision is yet to be taken.
Industry sources said that this investigation is unlikely to have any impact on Indian drugmakers since the imported generics from India is not hurting the US national interests.
Market Impact
Meanwhile, analysts said that zero tariff status for pharma sector will be a major upside for major players like Dr Reddy’s, Sun Pharma, Lupin, Cipla and Aurobindo Pharma who generate 30-40% of their revenues from the US.
Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance (IPA) said that strengthening the India–US medicines partnership is important as medicine security is a part of national security. “Generics are exempted from tariffs. As noted in the joint statement, overall pharmaceuticals (including generics) are subject to ongoing US Section 232 investigation. This is consistent with the approach across foreign trade agreements,” he said.
The joint statement doesn’t mention about the tariffs that India will charge on the US drugs entering the country. In FY25, India imported finished drugs worth Rs 3,352 crore from the US, making it the largest drug import market.
The medical devices sector has asked for reciprocal fairness so that the deal becomes mutually advantageous for both countries.
“The CDSCO import licenses for US devices are already faster than for Indian manufacturers, who face mandatory inspections. Our US exports stood at $750 million versus $1.6 billion of imports last year. US FDA’s preference for ACSA over NABL labs adds asymmetry,” said Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD).
In FY25, India exported pharmaceutical formulations worth $9.8 billion to the US. It was about 40% of the total Indian pharma exports. During FY26 (April-December 2025), Indian pharma exports stood at $23.1 billion with US contributing to about 4% in exports growth.