Last Updated on November 19, 2024 by The Health Master
Trump
The possible revival of Donald Trump’s presidency and his “America First” trade policies are sparking discussions across industries worldwide.
For Indian pharmaceutical companies, the focus on the China Plus One strategy, higher tariffs on Chinese goods, and supply chain diversification could unlock new growth opportunities.
Here’s a detailed look at how Trump’s policies could shape the landscape for Indian pharma Industry.
The US: A Vital Market for Indian Pharma Industry
The United States remains a cornerstone for Indian pharmaceutical exports, accounting for approximately 30% of total sales and capturing a staggering 40% volume market share in the generic drug segment.
As global dynamics shift, Indian drug manufacturers are well-positioned to leverage these changes due to their stronghold in the generic drugs market and competitive pricing.
Key Advantages for Indian Pharma Industry:
- China Plus One Strategy: Diversifying supply chains away from China opens doors for Indian firms to increase their share in the global market.
- Higher Tariffs on Chinese Goods: With potential tariff hikes on Chinese imports, Indian pharmaceutical companies could step in to bridge the gap in the US market.
- Biosecure Act Benefits: The proposed US Biosecure Act aims to localize pharmaceutical manufacturing while encouraging trusted global partners like India.
Challenges and Opportunities
While the Trump administration’s agenda may benefit Indian Pharma Industry, experts caution about potential risks.
The implementation of localization rules and pricing pressures could pose hurdles.
Sujay Shetty, Global Health Industries Advisory Leader at PwC India, notes that the “America First” approach and new regulations might create a “mixed bag” of outcomes.
He advises companies to “wait and watch for clarity.”
Emerging Themes from Trump’s Policies
- Protectionism: A push to reduce dependence on foreign imports.
- Tax and Inflation Control: Policies focusing on tax reductions and economic stability.
- Contract Manufacturing Boom: Indian companies are already witnessing an uptick in contract manufacturing opportunities as global pharma giants seek alternative suppliers.
CDMOs: The Rising Stars
The growing importance of Contract Development and Manufacturing Organizations (CDMOs) in India cannot be overstated.
Indian CDMOs stand to benefit significantly from the Biosecure Act, as they are trusted partners with regulatory-compliant facilities.
Future Investments to Watch:
- Advanced Manufacturing Technologies: Companies are investing in modern facilities to meet global standards.
- Strategic Alliances: Partnerships with US-based innovators are becoming a norm to enhance market reach and credibility.
Potential Risks to Consider
Not all is smooth sailing for Indian pharma industry in this scenario.
As Kinjal Shah, Senior VP at ICRA, explains, companies might need to increase investments in advanced technologies to stay competitive.
Additionally, Krishnanath Munde from India Ratings & Research warns that the implementation of a 10% tariff on imports could negatively impact export-dependent Indian pharma industry in the short term.
1. What is the China Plus One strategy?
The China Plus One strategy involves reducing dependency on China by diversifying supply chains to include other countries, such as India. This strategy is particularly relevant for industries like pharmaceuticals.
2. How will the Biosecure Act impact Indian pharma Industry?
The Biosecure Act encourages localized manufacturing in the US while offering opportunities for trusted global partners like India to increase exports and collaborate on manufacturing.
3. Are there risks for Indian pharma industry due to Trump’s policies?
Yes, potential risks include pricing pressures, localization rules, and higher tariffs on exports to the US.
4. What role will CDMOs play in this scenario?
Indian CDMOs are set to play a pivotal role by offering contract manufacturing services to global pharma companies, leveraging their cost-effective and compliant operations.
Disclaimer: This article contains information derived from the source mentioned below. Our team utilized an AI language model to rewrite and present the news or article in a unique format.
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