How constrained do the Indian industry leaders feel on the much discussed ‘liberation day’ of the US where new tariffs are to be imposed on imports into the US from all over the world? Some of the leading names from Indian industry while preferring to wait and watch the developments unfold did felt it may be better to view the announcements made on April 2nd by the US as a starting point or a starting line drawn for negotiations. Not wanting to be named, the view was that the new tariffs will trigger an evolving negotiation journey and it is really the unfolding picture over the next few months that needs to be considered for evaluating the actual implications for the industry. As a leading Indian corporate, who did not wish to be named summed it up: “Panic and kneejerk reaction is not the way to deal with this and instead of feeling consumed by the shock and awe of the developments, it is better to stay calm and think through and get better prepared for negotiations having known the starting point.”
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The markets were expected to react and have the developments discounted but that to some of them was by itself not enough. Instead, they favoured focus on the negotiation abilities and thereafter evaluate the implications for both US and India. For instance, if the pharmaceutical industry was bracing itself for a worse-case scenario of 35 per cent tariff, including 10 per cent reciprocal tariff and 25 per cent sector-specific tariff, it was really about articulating the implications for the patients in the US. After all, as one industry leader reminded, “India remains a major supplier of low-cost generic medicines in the US.” A recent McKinsey titled, “Shaping the future of India’s pharmaceutical operations”, has described India as the world’s largest supplier of generic drugs, accounting for 20 per cent of global volumes, including 40 per cent of generics demand in the United States. According to this report, India was today the third largest global exporter of pharmaceuticals by volume and ranks 11th by value. India already has over 700 Food and Drug Administration (FDA)-approved sites.
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Arvind Singhal,
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