Indian drugmakers seek exemption for generics from US supplies probe

Mumbai: A US government probe into pharmaceutical imports and their implications on national security must exclude generic drugs from its purview, a business delegation from the Indian pharmaceutical industry told Union commerce minister Piyush Goyal at a meeting held last week.

The local industry's contention assumes significance in the backdrop of the impending India-US bilateral trade agreement and the uncertainty over reciprocal tariffs being imposed by the US government. So far, the US has exempted pharmaceutical imports from the proposed tariffs of 50%, half of which are to kick in on August 27.

Experts said that the issues related to supplies of medicines from India to the US are critical given the plans of Prime Minister Narendra Modi to visit China for the upcoming Shanghai Cooperation Organisation meeting later this month in Tianjin.

In April, under Section 232 of the Trade Expansion Act, 1962, the US government had initiated an investigation into imports of medicines to the country, sparking concerns over potential supply chain disruptions and pricing volatility there. The law grants authority to the US President to impose restrictions on such imports if those are deemed to threaten US national security.

People familiar with the mater told ET that the meeting with the pharmaceutical industry was called by the commerce ministry to discuss a range of issues, including ways to tackle abrupt disruptions and to strengthen the industry with closer attention to new research and innovation.

A note in May from global consulting firm EY said that historically, Section 232 has been used to justify tariffs on steel, aluminium and automobiles.