US Tariffs to Impact India’s Medical Device Industry, Pharmaceuticals Exempt
The Trump administration’s decision to impose reciprocal tariffs has brought a sigh of relief for India’s pharmaceutical sector, as it remains exempt. Given that the US accounts for 31.3% of India’s total pharma exports in 2024, the exemption ensures continued stability for Indian drug manufacturers. However, the medical device industry, still in its growth phase, is set to face significant challenges due to the tariff hike.
How Will the Tariffs Affect India’s Medical Device Industry?
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Sharp Increase in Tariffs
The US has raised tariffs on Indian medical devices to 26%, a sharp jump from the earlier range of 0-6%. In contrast, India imposes tariffs between 0-7.5% on US imports, with most hovering around 7.5%. “This disparity will put Indian manufacturers at a disadvantage,” said Rajiv Nath, Forum Coordinator at the Association of Indian Medical Device Industry (AiMeD). -
Trade Deficit in Medical Devices
India imports medical devices worth more than double the value it exports to the US. According to parliamentary data, India exported $714.3 million worth of medical devices to the US, while its imports stood at $1,519 million. -
Minimal Competitive Edge Over China
The tariff on Chinese medical device imports is set at 34%, just eight percentage points higher than India. While this could provide a small price advantage to Indian manufacturers in certain low-cost, high-volume consumables, the overall impact remains uncertain. “India might see minor gains over China, but American buyers tend to favor established brands, limiting the benefits,” said Himanshu Baid, Managing Director of Polymedicure.
India’s Medical Device Exports to the US
India’s top medical device exports include polyethylene bags, catheters, artificial joints, surgical knives, spectacle lenses, MRI machines, ECG machines, endoscopes, and X-ray tubes. Interestingly, some items like MRI machines and artificial joints appear on both the export and import lists. “Indian manufacturers are globally competitive in some areas, but American brands dominate the domestic market due to brand preference,” Nath added.
India’s Medical Device Imports from the US
India primarily imports MRI and CT machines, artificial joints, gas analysis apparatus, mass spectrometers, and orthopedic appliances from the US. Tariffs imposed by India on these products generally stand at 7.5%, with some exceptions—gas analysis apparatus is taxed at 10%, while high-end chromatographs and mass spectrometers face no tariffs.
Why is the Pharmaceutical Industry Exempt?
Indian pharmaceutical companies play a crucial role in the US healthcare system, supplying 47% of all generic drugs prescribed in the country. In five of the ten most commonly treated conditions—including hypertension, mental health, lipid control, nervous system disorders, and anti-ulcer treatments—over half of the prescribed medicines originate from India.
Moreover, in 2022 alone, Indian pharmaceuticals helped the US save $219 billion, according to IQVIA. Given this substantial contribution, India’s pharmaceutical exports, valued at $8.7 billion, remain unaffected by the new tariffs.
