New Delhi May Ease Trade Barriers On US Medical Devices If Offered Similar Access For Indian Pharmas

India is considering removing trade barriers on American medical devices-one of the key demands from Washington-on the condition that the United States reciprocates by granting greater access to Indian pharmaceutical products, including generic medicines, sources familiar with the ongoing sector-specific discussions under the proposed Indo-US Bilateral Trade Agreement (BTA) have said.

According to these individuals, who requested anonymity, the US has raised concerns about both tariff and non-tariff barriers affecting the export of its pharmaceutical goods and medical devices to the Indian market.

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Negotiators from both countries are actively engaged in addressing these issues, reported Hindustan Times.

In FY24, India exported pharmaceuticals worth $27.85 billion, reflecting a 9.7% year-on-year growth. The sector had already reached nearly $27 billion in exports in the first 11 months of FY25, with a 7% annualised increase.

The United States remains India's largest pharmaceutical market, accounting for just over 30% of total sectoral exports. While the US currently imposes no tariffs on most pharmaceuticals, Indian tariffs on American medicines range from 0% to 10%.

Although the US has thus far refrained from including the pharmaceutical sector in its list of retaliatory tariffs, former President Donald Trump recently (8 April) alluded to a "major" forthcoming tariff on pharmaceutical imports, suggesting it could follow a sector-specific model, similar to past tariffs on steel.

"It's possible the US will impose a sectoral tariff on pharmaceutical imports. However, such a move could be temporary as pharmaceuticals are a central part of the BTA discussions," one source noted. "The first phase of the agreement is expected to be finalised by the second quarter of FY25. In the meantime, Indian pharmaceutical companies and exporters have been advised to diversify and de-risk their operations."

This sector holds political significance for President Trump, and was also highlighted in the 2 April executive order's accompanying fact sheet. The document stated: "India imposes uniquely burdensome and/or duplicative testing and certification requirements in sectors such as chemicals, telecom products, and medical devices, which hinder American businesses from selling in the Indian market. Removing these obstacles could increase US exports by at least $5.3 billion annually."

Negotiators are approaching the BTA with a spirit of reciprocity. "A mutually beneficial deal is on the horizon. It is expected to provide expanded market access for Indian pharmaceuticals and help strengthen global supply chains," a source added. India may also consider aligning its quality regulations with global standards, which would ease regulatory approvals and certification processes for American goods sold in India.

The source cited the India-UAE Comprehensive Economic Partnership Agreement (CEPA) as a precedent. It was the first trade agreement to include a dedicated annex on pharmaceuticals, allowing Indian drugs to receive automatic registration and marketing authorisation within 90 days-if already approved by regulators in the US (USFDA), UK (UKMHRA), EU (EMA), or Japan (PMDA).

According to the Department of Pharmaceuticals, India's pharmaceutical sector is the third largest globally in terms of volume and 14th in value. Its total turnover for FY 2023-24 stood at ₹4,17,345 crore, growing at an average annual rate of 10.08% over the last five years. Exports for that period totalled ₹2,19,439 crore, with imports amounting to ₹58,440 crore.

India is the world's largest supplier of generic medicines, producing around 60,000 generic brands across 60 therapeutic areas.
"India's contribution to providing affordable HIV treatment is one of the most notable success stories in modern healthcare. Due to their affordability and quality, Indian pharmaceuticals are widely preferred, earning India the moniker 'pharmacy of the world'," the department said.