Page 10 - ITLN May-June 2025

Cover Story
Indian Exports

say China plus one, they are not saying
China plus India; India could be one
of the options, but Southeast Asia,
Vietnam, Malaysia—they have their
own pockets of excellence.”
As global trade dynamics shift
and uncertainty clouds Indian
pharmaceutical exports as well,
especially to key markets like the US,
Vijay Shetty, Senior Vice President –
Global Distribution and Supply Chain at
Alkem Laboratories, remains cautiously
optimistic. Shetty underlined that while
tariff threats loom, practical constraints
and shared economic interests may
keep drastic moves in check.
He questioned the viability of such
tariffs. “For the US to put a tariff
on Indian pharmaceutical exports
would not be that practical. One of For many Indian pharma
the reasons is that the prices from companies, up to 40% of
Indian manufacturing organisations revenue comes from the US.”
are already competitive, especially However, he acknowledged
in the generic space. Typically, these that the pricing landscape has
products, which go off patent, we changed significantly. “With
manufacture at the best cost, and distributor consolidation in the US,
that’s how the country benefits.” things have become more competitive,
Shetty pointed out the immense leading to a price war.”
savings the US reaps from Indian “Now you look at volume growth to
generics. “Out of the 10 prescriptions recover the original sales,” he said,
prescribed in the US, a minimum of noting that while the opportunity in
four to five medicines are India-made. volume remains, the pressure on On the broader global canvas, the
If the same is manufactured by a margins is intense. US-China trade war has amplified the
multinational, the prices would be Shetty also observed a shift toward urgency for de-risked supply chains—a
much higher.” greater participation. “Earlier, there need India has acknowledged but
If tariffs are levied, he warned, the were few dominant Indian pharma cannot address overnight. “A tariff war
consequences would ripple across the companies in the US; now there are has an impact,” Shetty said. “We’ve
supply chain. “The US importers are the many.” already seen the stances that both
ones who would get impacted more. The Amid this pricing pressure and China and the US have taken—they’re
price will increase, and even if we absorb geopolitical uncertainty, Indian pharma softening their stand, reciprocating
50% of that increased tariff, it would not firms are expanding their horizons. steps. Both understand that China
be viable for Indian manufacturers to “Diversification is taking place,” cannot be replaced overnight.”
produce many products.” said Shetty. “In the last three to five He pointed to domestic efforts:
He added, “They may decide not to years, almost all pharma companies “India has come up with the
manufacture those products, which have been looking at other markets. Production-Linked Incentive (PLI)
would impact the demand for Indian Europe is another big region, Africa as scheme to boost domestic production
manufactured quality products in the well, and the rest of the world—GCC of APIs and key starting materials. But
US. Is China going to fill that gap? We countries, South Asia, Asia Pacific—are it will take another five to ten years
already know about the trust and quality all being focused on.” before we can compete with China.”
issues with products coming from “Earlier, we had a few concentrated India's PLI scheme is a government
China. That’s why India has an edge.” export markets; now, the focus is initiative aimed at boosting domestic
According to Shetty, the US broader for both volume and value manufacturing by offering financial
remains a vital market. “Since the growth,” he added. “We are registering incentives to companies based on
last three to four years, the US has more products in these countries to their incremental sales of products
been a big market in terms of value. take some share of the business there.” made in India.
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