Cipla CEO- Not letting Tariffs on Indian drugmakers

Ayesha Agrawal

01 Mar 2025 — 2 min read

US government considering tariff hikes, Umang Vohra's statement on tariffs

President, Donald Trump: The U.S. government has been considering tariff hikes on imports from various sectors, including pharmaceuticals, as part of broader trade policy measures. India’s basic customs duty on pharmaceutical imports is 10%. However, some lifesaving drugs and vaccines are exempt from this duty. Recently, the Indian government announced a full exemption to 36 lifesaving drugs from the basic customs duty—the U.S. doesn’t impose any import duty. Still, if the US enforces any tariffs based on diplomacy, India would need to lower its duties on US pharmaceutical imports

In a recent statement, Cipla CEO Umang Vohra highlighted, " Indian pharmaceutical companies should not allow U.S. imposing heavy tariffs to dictate their business strategies. The discussion within the U.S. government regarding this tariff is raising concerns regarding the impact on Indian drug makers, who supply nearly 50% of the generic drugs in the U.S. market."

Umang Vohra, Cipla CEO advice on tariffs

According to Vohra, suddenly shifting manufacturing bases or making major structural changes might not be the best solution. He notes that setting up new units or plants to avoid tariffs could lead to underutilization. Many pharmaceutical companies have already expanded their manufacturing units abroad, in countries like the US and Europe. However, moving more operations overseas to avoid tariffs could be costly and complicated. It would require regulatory approvals, skilled labor, and infrastructure development.

Vohra advises businesses to focus on their long-term goals, innovation, and efficient production instead of reacting impulsively to uncertain trade policies.

Dilip Shanghvi, Managing Director of Sun Pharma said, " I don't know how much difference tariffs will make to us and it will not justify relocating our manufacturing, Ultimately the tariff impact will be passed on to consumers."

Crucial role of Indian Generics in the global market

Despite facing multiple challenges, India's pharmaceutical industry plays a vital role in the global supply chain. It provides affordable generic medicines to countries around the world. Indian drug manufacturers are successful due to several factors including the production of medicines at a comparatively lower cost, they have access to a strong pool of talented professionals, and well-established regulatory processes.

The Indian industry is also expanding its presence in global markets such as Africa, Latin America, and Southeast Asia, which reduces the dependence on any single region. This strategic move has enabled Indian pharmaceutical companies to expand their global footprint and cater to the diverse needs of markets. Indian generics have a significant role in controlling drug prices, and a major shift from these imports could impact U.S. consumers and healthcare systems.