India-US Trade Agreement Set to Boost Pharmaceutical and Medical Device Exports

The India-US trade agreement is set to provide a major boost to Indian pharmaceutical and medical device exporters by lowering tariffs in the world’s largest healthcare market. The reduced duties give Indian companies a clear pricing edge over Chinese suppliers, who currently face higher baseline rates.

The agreement comes at a time when the US already accounts for an estimated 30% to 40% of Indian pharmaceutical sector revenues. These structural changes position Indian manufacturers to benefit from improved cost competitiveness, stronger market access and expanded export opportunities.

Lower Tariffs Strengthen India’s Position in Global Healthcare

Under the new agreement, Indian pharmaceutical and medical device exports gain a sharper price advantage due to tariff reductions that fall below China’s prevailing rates. India previously faced duties of up to 50%, compared with China’s approximate 30%, constraining competitiveness in key product categories.

With India’s rate now dropping below China’s base level, the tariff reset directly supports Indian manufacturers seeking to expand their US market presence. This pricing advantage is especially significant in generics, biosimilars and medical consumables, where cost efficiency plays a critical role in procurement decisions.

Pharmaceutical Exporters Gain from Improved Market Access

For Indian drugmakers, the US contributes 30% to 40% of sector revenues, and the lowering of reciprocal taxes is seen as incrementally positive for companies with strong generics portfolios. The agreement improves market access by easing cost pressures and reinforcing India’s position as a global supplier of affordable medicines.

Reduced tariff exposure helps maintain competitive pricing, particularly in product categories where margins are tightly compressed. With the US representing a stable demand base, tariff relief helps Indian companies expand export volumes without compromising price structures.

MedTech And Chemical Inputs Benefit from Tariff Parity

Medical device manufacturers have welcomed the deal, noting that tariff parity, and, in some cases, an advantage, against China could be decisive as global buyers diversify supply chains. India’s new tariff structure favours domestic exporters during a period of heightened China+1 shifts, giving them a stronger footing in negotiations with overseas buyers.

The speciality chemicals segment that supports pharmaceutical manufacturing also stands to benefit, with the reduced duties acting as a structural reset. Lower input costs and more predictable trade terms may support smoother production cycles and export planning.

Read More: Goldman Sachs Lifts India’s CY26 GDP Growth to 6.9% After US–India Trade Deal.

Conclusion

The India-US trade agreement marks a substantial shift for Indian pharmaceutical and medical device exporters by lowering tariffs and improving competitiveness against Chinese rivals. With the US already a major contributor to sector revenues, the tariff relief supports stronger pricing power and export growth potential.

Additional benefits in specialty chemicals, regulatory ease and supply chain resilience further enhance India’s market positioning. The deal is expected to generate wider opportunities across healthcare-linked manufacturing segments.

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