Being the global pharmaceutical hub, Telangana is treading cautiously on how to respond to the situation in the wake of the imposition of 100 per cent tariffs by the United States.
Since the Donald Trump administration is currently targeting only the branded and patented drugs, the pharma industry wants to treat this as an opportunity to step up trade negotiations with other countries, diversify export markets, and invest more heavily in complex generics and biosimilars.
Experts say that since local companies primarily focus on manufacturing low-cost generic drugs, they remain largely unaffected by these tariffs.
While the current exemption for generics protects their existing business operations, there are fears that the US may redefine or expand the scope in future to include complex generics or other pharmaceutical categories.
In response to this uncertainty, several companies are actively exploring US-based manufacturing partnerships to ensure business continuity and regulatory compliance.
Telangana, particularly the capital Hyderabad, has established itself as a global pharmaceutical hub, exporting vaccines and pharmaceutical products to over 150 countries through 214 USFDA-approved manufacturing facilities.
The state contributes approximately one-third of India's total pharmaceutical production and accounts for one-fifth of the country's pharmaceutical exports.
Hyderabad serves as the epicentre of this pharmaceutical ecosystem, housing over 800 industrial pharmaceutical units. The city is home to renowned firms, including Dr Reddy's Laboratories, Aurobindo Pharma, Hetero Drugs, Laurus Labs, and MSN Pharmaceuticals.
US, top destination
America has emerged as the top destination for merchandise exports from Telangana during the 2023-24 fiscal year, with pharmaceuticals accounting for 32 per cent of total exports. According to Telangana's Socio-Economic Outlook 2024, the US captured the largest market share, receiving 28.16 per cent of the state's total exports. The UAE followed at a distant second with 6.90 per cent, while China accounted for 5.20 per cent.
For instance, Dr Reddy's Labs maintains a large generics portfolio in North America's dermatology segment and operates a facility in Middleburgh, New York, that manufactures active pharmaceutical ingredients.
"President Trump's 100 pc tariff on branded and patented pharmaceutical imports is a wake-up call for global pharma exporters," says Ram Chintalapudi, Founder and CMD of Hyderabad-based Skinska Pharmaceutica. While India's generics remain largely insulated for now, the move signals a shift toward protectionism that could reshape future access.
During fiscal year 2023-24, Telangana's merchandise exports reached ₹1,16,182 crore, with pharmaceutical products alone contributing 32 pc of this total— equivalent to ₹36,893 crore. Pharmaceutical products lead the export categories, followed by organic chemicals, which generated ₹23,257 crore in exports and contributed 20 pc to the state's total export value.
Dr D. Srinivas Reddy, Chairman of Optimus Pharma, said: "The immediate impact on India from the pharma tariffs could be limited, as India is the world's largest producer of generic drugs and supplies nearly 20 pc of global demand. However, top Indian pharma companies have been attempting to move up the value chain with an increasing focus on patents and novel drugs."
He explained that the new tariff mainly targets branded drugs and doesn't immediately affect Indian generic exports, which comprise most of India's shipments to the US. "For Telangana's pharma industry, the impact is also expected to be limited, since its exports to the US are heavily generic and therefore exempt. Still, the impact isn't entirely negligible, as any shift in policy could affect companies with exposure beyond generics," he said.
Dr Reddy emphasised that while the tariff was not likely to hurt Indian pharma significantly in the short run, it does create uncertainty for the future. " The exemption for generics protects current business, but the real risk is whether the US later redefines or expands the scope to include complex generics or other categories," he added.
Ram Chintalapudi, whose company exports USFDA and UK Cosmetic Council-approved products to the US and UK, highlighted the critical role of generics in American healthcare. "Generics form the backbone of US healthcare, filling nearly 90 pc of all US prescriptions and ensuring medicine remains affordable for millions of Americans."
He warned that imposing tariffs on generics would dramatically drive up costs for US patients, strain public health budgets, and create severe drug shortages, especially for critical therapies. That's why both US regulators and policy experts recognise the importance of keeping the generic supply chain — which India leads globally — robust, competitive, and insulated from such measures," he said.
While acknowledging that the move has spurred short-term stock market anxiety and uncertainty, he maintained that fundamentals remain strong since India's main revenue derives from generics, where the US lacks sufficient domestic capacity and cost efficiencies. However, he cautioned that any future extension of tariffs to generics would pose systemic risks to both countries.
"Strategically, this signals the need for India to step up trade negotiations, diversify export markets, and invest even more in complex generics and biosimilars— fields where tariff risk may eventually arise, but also where innovation and diversification offer resilience," he said.
Also read: BRS will sweep away Congress in Telangana: KTR
Follow us
