Tariffs Announcement
US President Donald Trump declared new tariffs for a number of imported products. His decision involves imposing a 100% import tariff on branded and patented drugs. He also levied 50% tariffs on kitchen cabinets and bathroom appliances, 30% on upholstered furniture, and 25% on heavy trucks.
Trump said the tariffs will be effective from October 1. He clarified that the action is in the interest of national security and other economic factors. Nonetheless, drug firms constructing plants in the United States will be exempted from these taxes.
Impact on India
The new levies would have a major impact on India, which is one of the largest exporters of medicines to America. During the 2023–24 financial year, India shipped out $27.9 billion worth of pharmaceutical products. Of this, some 31% ($8.7 billion) was exported to America. India has already shipped out $3.7 billion worth of pharmaceutical products to America in the first half of this year alone.
India exports 45% of generic drugs and 15% of biosimilar drugs in the US. Dr. Reddy's, Aurobindo Pharma, Zydus, Sun Pharma, and Gland Pharma generate 30–50% of their business from the US. The prices of medicines in the US could go up drastically with the new tariffs.
Ongoing Trade Issues
Trump previously had 50% tariffs against India for its oil business with Russia. Negotiations on trade between the two nations are ongoing. The most recent tariffs on drugs could lead to more difficulties in bilateral trade relations.
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