US President Donald Trump has signed an executive order with the objective of promoting the production of drugs in his country and reducing the time to approve drug plants. India is a major exporting country of drug in America. However, industry sources and analysts believe that Trump's move is not likely to have a direct impact on Indian pharma exporters.
Several senior officials of pharma companies said that the decision to expand manufacturing in the US is a strategic decision and it would depend on certain products. The chief finance official of a prominent pharma company said that for more margins or for products where an Indian company has created an American partner for co-development and marketing, it can consider starting a manufacturing unit in the US.
He said, 'The decision to open manufacturing unit in the US may vary from companies and products. Overall it will depend on viability. He clarified that his company has no such plan at the moment. Another veteran of the pharma industry said that it is natural for the US to encourage domestic production. He said, 'Every country would like to generate employment and promote local industries. I do not think this will affect Indian exporters. We will decide to move production in America only on the basis of viability.
Trump has also instructed the US Food and Drug Administration (USFDA) to work closely with domestic manufacturers to provide initial assistance before the facilities are online. Health regulator for foreign producers has been asked to improve API source reporting. The order also directed the environmental protection agency to work for the speed in the construction of plants. It states that industry estimates show that it may take 5 to 10 years to set up a new manufacturing unit for pharma and important input, which is unacceptable from the national security point of view.
Reuters said that FDA Commissioner Marti Makeri said while signing the executive order that the regulator intends to start surprise inspection of foreign plants. The regulator wants the monitoring of the drug manufacturing in line with the rules of the US. This order of Trump affected the shares of Indian pharma companies. Aurobindo Pharma shares fell 2.5 per cent on the Bombay Stock Exchange and the Nifty Pharma index fell by 1.1 per cent.
However, Uday Bhaskar, former Director General of the Pharmaceutical Export Promotion Council of India (Pharmaxil), said that there is no possibility of any impact on Desi Pharma exporters. Uday Bhaskar said, 'I think Trump is trying to encourage his domestic pharma companies to increase local production. Many American companies have manufacturing units in Ireland, Germany etc. The US imports about 80 percent of its needs and in this case it would like to become self -sufficient. The US imports drugs worth $ 200 billion every year. India exports drugs worth $ 10 billion to the US, mostly generic drugs. So I do not see much to have much impact.
Several companies, including Rush, Navartis, Ellie Lily and Johnson & Johnson, have announced a huge investment in manufacturing in the US in recent weeks. The cost will play an important role regarding the moving of manufacturing of Indian companies to the US. Sharvil Patel, Managing Director of Zayadas LifeSieces, told Business Standard earlier this month that manufacturing would be expanded but a large part of it will remain in India as the first principle is to make affordable medicines. India is very competitive in terms of manufacturing cost. Patel said that India will remain the center of manufacturing.
Pharma analyst in Ashika Group, institutional research Nirali Shah said that India's large pharmaceutical companies already have a global presence and with any new instructions like 'buy from American company', companies can re -evaluate the American strategy. Vishal Manchanda, Senior Vice President (Research) in Systematics, says that apart from making the proposed regulatory route easier, companies will not be motivated to move their manufacturing until manufacturing is encouraged. Glenmark hopes that her injectable unit in Monroe, Northern Carolina will be on track in FY 2026. The company is ready to expand the site further.
First Published – May 6, 2025 | 11:33 PM IST
