Trump hits Indian exports with 26% reciprocal tariff, medtech industry sounds alarm

Industry leaders warn that the move could hinder growth, shake up global supply chains, and create new barriers for Indian manufacturers seeking to expand in the US market.

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In FY24, India’s medical device exports to the US stood at $714.38 million, while US exports to India were significantly higher at $1.52 billion, according to the Exports Promotion Council of Medical Devices.

The tariff could disproportionately affect Indian exports of disposables like catheters, syringes, cannulas, and extension lines, as well as implants such as cardiac stents and orthopedic devices.

The Association of Indian Medical Device Industry (AiMeD) has raised concerns over the tariff, emphasizing that global medical device market thrives on cooperative trade. It urged the need for fair trade practices, noting that Tariff and non-tariff barriers must be addressed to ensure long-term sustainability.

India has long been a key supplier of cost-effective, high-quality medical devices to the US, particularly in high-volume, low-cost consumables. 

“This new tariff may possibly impact Indian Medical Devices exports and we have to explore windows of opportunities where USA has been seeking to diversify its supply chain dependence on any one nation,” said Rajiv Nath, forum coordinator, AiMeD.

While some experts believe India may gain a slight cost advantage over Chinese manufacturersothers argue the real challenge lies in regulatory barriers. 

“While India may seemingly gain a marginal price advantage over China (8%) in certain low-risk, high-volume consumables, the real impact may not be significant if our prices were higher than 15% and the impact has to be further studied compared to other competing nations,” said Himanshu Baid, managing director of Poly Medicure Ltd, a medical device manufacturer specializing in infusion therapy, oncology, anesthesia, respiratory care, urology, gastroenterology, surgery, dialysis, and more.

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However, Baid pointed out that non-tariff barriers, such as stringent FDA regulations, remain a bigger obstacle than tariffs themselves.

“Regulatory hurdles in the US are steep, with FDA (US Food and Drug Administration) approval costs ranging from $9,280 to over $540,000, whereas US exporters face relatively minimal costs when entering India. Addressing these imbalances through bilateral collaboration is crucial,” he added.

India’s medical devices market, valued at $11 billion in 2022, is projected to grow to $50 billion by 2030, with a CAGR of 16.4%. However, with high US tariffs and strict regulatory controls, Indian manufacturers may have to rethink their market strategies.

Nath stressed the need for government intervention: “India must prioritize healthcare security by strengthening domestic manufacturing and reducing dependency on foreign markets, Nath said, urging the government to advocate for a balanced approach to tariffs and regulatory policies in bilateral negotiations.

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India is the fourth-largest medical devices market in Asia, after Japan, China, and South Korea, and ranks among the top 20 globally.

These high tariffs imposed by the US will give an overnight boost to American manufacturers, allowing them to maximize capacity utilization and expand their market share, Nath said.

He added that in addition to tariffs, non-tariff barriers—such as stringent FDA regulations and the Buy American policy for government procurement—could make the US less attractive as a market for Indian exporters. Instead, companies may find it more viable to invest in US-based manufacturing for certain products.

The 26% tariff on Indian exports to the US is in line with global trends: China (34%), Europe (20%), Vietnam (46%), Taiwan (32%), Japan (24%), South Korea (25%), Switzerland (31%), Indonesia (32%), Malaysia (24%) and Turkey (10%).

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Meanwhile, President Donald Trump has not announced any reciprocal tariff measures on India’s pharmaceutical sector.