US pharma tariff: Vaiko warns of economic war, seeks special Parliament session

Chennai, Sep 27 (IANS) Marumalarchi Dravida Munnetra Kazhagam (MDMK) general secretary Vaiko has warned that the United States' latest decision to impose a steep 100 per cent import duty on medicines could deal a severe blow to India's pharmaceutical exports and trigger a wider trade crisis.

Quoting data from the World Trade Organization (WTO), Vaiko said pharmaceuticals form India's single largest industrial export segment.

Each year, India ships about $12.7 billion worth of medicines to the US, the bulk of which are generic drugs.

Generics are copies of patented medicines whose 20-year exclusive rights have expired, enabling any qualified company to manufacture and sell them.

While India also exports patented and branded drugs, their volume is far lower compared to generics. Indian firms such as Dr Reddy's, Lupin, and Sun Pharma are among the biggest suppliers to the US market. But President Donald Trump has now announced that from October 1, all medicines imported from companies without manufacturing plants in America will face a 100 per cent tariff.

The White House indicated that firms setting up production in the US could avoid the levy.

"This move directly targets India's pharmaceutical industry," Vaiko said, noting that last year Indian companies exported medicines worth Rs 31,000 crore to the US, and in just the first half of this year, shipments had already crossed Rs 32,000 crore. The new duty threatens to sharply reduce competitiveness and cut deep into India's foreign exchange earnings.

The latest tariff comes on top of an earlier 25 per cent duty Washington had imposed after India continued importing crude oil from Russia despite US pressure. That had already raised the effective import tax on Indian products entering the US to about 50 per cent.

Additional tariffs on other goods - 50 per cent on kitchen and bathroom fittings, 30 per cent on furniture, and 25 per cent on heavy trucks - have added to the strain.

Calling it an "economic war" against India, Vaiko urged the Union government to act swiftly.

"The Centre must immediately convene a special session of Parliament to discuss the US sanctions and find solutions to protect Indian exporters and jobs," he said, adding that New Delhi should engage Washington diplomatically while safeguarding national trade interests.

--IANS

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