NEW DELHI: The Trump 2.0 agenda, with its likely focus on China plus 1 strategy for pharmaceutical manufacturing and supply chain diversification, provides an incremental opportunity for Indian drug companies. Additionally, higher tariffs on Chinese goods could open new avenues for Indian pharma players to fill the supply gap in the US generic drug market, experts say.
The US remains a key market for Indian pharma, accounting for around 30% of total sales, and a 40% of volume market share. While there are potential risks associated with changes in duty structures and broader geopolitical dynamics, India's established strength in the global generic drug market positions it well to benefit from shifts in US trade and supply chain strategies, they added. .
Sujay Shetty, global health industries advisory leader, PwC India, told TOI: "Given the 'America first', low taxes and lowering inflation agenda of the incoming Trump administration, Indian companies should look for opportunities in the supply chain, given the Biosecure Act, potential pricing pressures and potential localisation rules around manufacturing. ...It appears to be a mixed bag. We need to wait and watch for clarity.''
Though Trump's agenda for second term will become clearer over the next few weeks, but there are key themes that have emerged from his previous presidency, including 'America First' trade policy, protectionism and reducing dependency on foreign imports, especially from China.
Indian pharma companies have already witnessed considerable increase in contract manufacturing opportunities from established global pharma majors. The proposed US Biosecure Act could benefit Indian CDMOs (contract development and manufacturing organisations).
"These companies are also likely to make further investments in regulatorily compliant manufacturing facilities and advanced technologies, to capitalise on the demand. It will also create higher opportunities for strategic alliances with US based innovator pharma companies," Kinjal Shah, senior VP & co-group head - corporate ratings, ICRA, said.
Krishnanath Munde, associate director, India Ratings & Research feels, "If there's implementation of a 10% tariff on goods imported into the US, then it would be a negative for Indian pharma export-oriented companies. Overall, even if there is to be slight disruption, China plus 1 strategy and US BioSecure Act will provide bigger benefits to Indian pharma companies in medium term."
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A business journalist with around two decades of experience track...
Read MoreA business journalist with around two decades of experience tracking key consumer-focussed sectors like consumer durables, retail, consumer goods, aviation, automobiles and advertising, as well as economic ministries of the Union government. Now, writes primarily on pharmaceuticals and healthcare, and on issues of consumer interest. Besides also looks at trends that are shaping consumer behaviour and the broad consumer landscape. \nYou can follow Rupali on Twitter@Rupalijee.
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