Overview
The US continues to be a significant market for Indian pharmaceuticals, contributing about 30% of overall revenues and 40% of the volume market share. India’s established dominance in the global generic pharma market places it in a strong position to profit from changes in US trade and supply chain tactics, they argued, notwithstanding the possible dangers connected with changes in tariff structures and broader geopolitical factors.

U.S. medicine shortage present an opportunity for Indian Pharma
With Donald Trump taking over as US president, Indian pharmaceutical professionals anticipate positive trade conditions. As stated previously, around 30% of India’s total pharmaceutical exports go to the US, making it a vital market for Indian pharmaceutical companies.

According to experts, the US is experiencing severe medicine shortages, which presents a chance for domestic pharmaceutical companies to grow and close the gap. Given the US’s shortages and backorders, industry insiders are optimistic about India’s future. They claimed that between 2025 and 2029, a large number of popular medications would lose their patents. Generics will present an additional growth opportunity for the Indian pharmaceutical business.

Market opinion on Trump 2.0
According to Sudharshan Jain, general secretary of the Indian Pharmaceutical Alliance (IPA), which represents the nation’s biggest pharmaceutical companies, India’s dedication to meeting the world’s need for life-saving medications is demonstrated by the fact that it has the most US FDA-approved plants outside of the US and is one of the biggest suppliers of generics to some of the nations with the strictest regulatory standards. Although India has solidified its position as the world’s pharmacy, providing high-quality, life-saving medications to more than 200 nations worldwide, it has also emerged as a significant pharmaceutical partner for the US, helping a significant number of patients there. India as a whole has received the most market authorizations for pharmaceuticals over the years, according to Jain.

Businesses such as Sun Pharma, Aurobindo, Dr. Reddy’s, and Torrent Pharmaceuticals are thriving in exports, which are mostly driven by the US market. In the US, the formulations industry is anticipated to perform strongly, especially because of backorders. According to an industry expert, the need has grown, and they are supplying the gap from India.

Pharma CEOs anticipate that limitations will be loosened under the Trump administration. According to another analyst, Trump is a smart businessman who would make judgments that could boost the Indian generics market in the future. With 87% of FDA-registered API factories located overseas, primarily in China, which leads production, the US depends on a global API supply chain. However, with its access to medications, India—which purchases 70% of its APIs from China—plays a crucial part in tackling global dependency.

Any tariffs imposed on China might help Indian API producers. According to Shriram Subramanian, MD of inGovern Research Services, all pharmaceutical firms will be keenly examining the Trump administration’s health sector reforms.

Data from the Directorate General of Commercial Intelligence and Statistics shows that exports to the United States increased from $7.5 billion in FY23 to $8.7 billion in FY24.

The China Plus One opportunity
Indian pharmaceutical businesses have an additional opportunity as a result of the Trump 2.0 agenda’s probable emphasis on China plus one approach for pharmaceutical manufacture and supply chain diversification. According to analysts, increased tariffs on Chinese imports may also create new opportunities for Indian pharmaceutical companies to close the supply gap in the US generic medication market.

India’s established dominance in the global generic pharma market places it in a strong position to profit from changes in US trade and supply chain tactics, they argued, notwithstanding the possible dangers connected with changes in tariff structures and broader geopolitical factors. Given the increasing diversity of the global supply chain, these developments may present Indian pharmaceutical companies with substantial chances to gain market share.

India has become a major alternative sourcing hub for countries that were previously heavily dependent on China due to its enormous industrial facilities. Positively, well-known international pharmaceutical corporations have already significantly increased their contract manufacturing prospects for Indian pharmaceutical enterprises. Indian CDMOs (contract development and manufacturing organizations) may win from the proposed US Biosecure Act.

The Biosecure Act, which aims to phase out US pharmaceutical companies’ partnerships with Chinese enterprises, may help Indian pharmaceutical companies, according to Cipla MD and worldwide CEO Umang Vohra. In light of anticipated changes in trade policy following Donald Trump’s election as president, he is upbeat about the prospects.

In the recent five years, the outlay of India on its healthcare services has surged to growth of 17 percent each year. Following the occurrence of pandemic, increase in speed of spending on healthcare is observed. The portion of healthcare expenditure out of India’s GDP has approximately increased to about 1.9 percent in the financial year 2024 compared to the previous expenditure of 1.3 in the financial year 2019.

Government expenditure on Healthcare
The major part of the government spending is channeled in the direction of social health security schemes like healthcare insurances and also on primary health care services. In the past few years, the Indian government’s expenditure has increased in programmes such as medical compensation and also health care insurances. Schemes such as Ayushman Bharat aids poor people in relieving their health expenditure burden.

Comparison with global healthcare spending
India’s spending on healthcare is comparatively lower than several developed and emerging economies. These countries spend in a range of 4 to 18 percent out of their GDP on healthcare services. India’s spending on healthcare infrastructure and workforce such as nurses, doctors, hospital beds, etc is quite less than the international standards.

Though it seems quite low in terms of spending on healthcare, it is important to look at differences in the situation of India and other countries across the globe. The Chairman of Narayan Hrudayalay, Devi Prasad Shetty states that the advanced countries have a big tax base. It helps these advanced countries to have large funds to spend on a large number of healthcare facilities and services. Another reason is the difference in population size. Several nations have smaller populations compared to India’s large population. It gives them an advantage to give access to free healthcare facilities to all. This step is difficult for India to take because of its huge population as well as its sparse resources.

Steps for improvement in healthcare
India should focus on creating an affordable healthcare environment for the population. It should increase the number of social security schemes like health insurance and the healthcare workforce base. The Indian government should focus on establishing healthcare care infrastructure and work on further expanding it. It should also take steps towards increasing the workforce base working in the healthcare sector. This can help India to fulfil the rising demand for healthcare service in the nation.

Expected growth in healthcare sector
From the year 2016, Indian healthcare observed an average annual growth of about 22 percent. It is expected to hit the record of about 670 billion dollars in the year 2026 compared to 370 billion dollars in the year 2022. The reason for the hike is increasing demand for advanced healthcare facilities.

Contribution of Private Hospitals
In the Indian healthcare services, the contribution of private hospitals is remarkable. According to the Apollo Hospitals, the portion of treatment given by private hospitals in terms of worth is expected to increase by about 69 percent in the financial year 2027 compared to the earlier 63 percent in the financial year 2020.

The reason for people relying on private hospitals and its services is more due to their plans of expansion. However, private healthcare services are usually expensive. The Indian government should take steps towards giving stimulus to private hospitals in order to provide low cost facilities to the people. It is also to initiate hiring of healthcare workforce at a faster speed. Overall, it helps the private sector to give healthcare facilities at an economical value.