Indian pharma holds firm on domestic production despite Trump tariff threat

The Story in Brief

Indian pharmaceutical companies are not rushing to move manufacturing to the United States despite former President Donald Trump's threat of up to 200 percent tariffs on imported generic drugs after a two-year transition period. Dr Reddy's Laboratories CEO Erez Israeli told analysts that shifting a facility within that window is not practical, with 25-30 percent of its revenue already coming from US contract manufacturers for products like the biosimilar Abatacept. The company launched six products in North America during the first quarter of FY27, including complex generics bosutinib and nintedanib.

Cipla is pursuing a dual strategy, using both American and Indian plants for upcoming US launches. Managing director Achin Gupta said three of four major launches in FY27 are respiratory products, with two filed from US facilities and one from its Goa plant. Cipla spent Rs 486 crore, or 6.8 percent of revenue, on research and development last quarter, largely for filings and key programmes. The company commissioned a metered-dose inhaler facility in Fall River, Massachusetts, and is scaling capacity there while its Long Island plant supports dry-powder inhalers.