India’s Pharma Exports to US at Risk as Commerce Department Probes Drug Imports #IndiaFinance

India’s pharmaceutical exports to the United States, worth nearly $10 billion annually, may come under pressure as the US government initiated an investigation on Monday into the national security implications of importing medicines and related ingredients.

The probe, launched by the US Commerce Department, will assess the extent to which the country’s reliance on foreign pharmaceutical imports could pose a threat to its domestic healthcare system.

India is among the top five pharmaceutical suppliers to the US, alongside Ireland, Germany, Switzerland, and other European nations. Between 2015 and 2023, India’s share of US pharmaceutical imports rose from 6% to 11%. In contrast, European suppliers have retained or expanded their shares, with Ireland now accounting for 28% and Germany 21%, according to Nuvama data.

India accounts for around 6% of the US’ total pharmaceutical imports, supplying both finished drugs and active pharmaceutical ingredients, the research firm had said. In 2023, the US imported approximately $170 billion worth of pharmaceutical goods, with India’s contribution at just under $10 billion.

The investigation in the US falls under Section 232 of the US Trade Expansion Act, which allows the government to determine whether specific imports threaten national security. This section has been previously used to impose tariffs on steel and aluminium.

The move — which followed an announcement by the Trump administration in the Federal Register on Monday, outlining plans to examine imports of pharmaceuticals, APIs, and derivative products alongside a parallel probe into semiconductors — marks a shift in US trade policy towards the pharmaceutical sector, which had largely been shielded from trade measures on humanitarian grounds.