India’s pharmaceutical manufacturers are reassessing their global expansion strategies as uncertainty over access to the US market creates new trade risks. At the same time, improved market access through trade agreements is opening opportunities across Europe, the UK, New Zealand and other international markets, according to GlobalData.
The US remains a major destination for Indian pharmaceutical exports, accounting for more than 30% of shipments in 2025, according to India’s Department of Commerce. However, concerns over potential US tariffs on generic medicines are encouraging Indian drugmakers to diversify their export destinations and strengthen their global presence.
US Tariff Risks Prompt Indian Pharma Companies to Reassess Export Strategies
US President Donald Trump’s announcement in July 2026 of significant tariffs on generic medicines has raised concerns about future trade conditions. The measures are scheduled to take effect in 2028, giving Indian pharmaceutical manufacturers time to assess their exposure and explore alternative markets. Although the US remains strategically important, establishing large-scale manufacturing facilities there could increase costs for Indian companies because of higher labour and production expenses. Consequently, manufacturers are evaluating ways to maintain their competitiveness while reducing dependence on a single export market.
Trade Agreements Open New Markets for Indian Pharmaceutical Exports
India’s expanding network of trade agreements could help pharmaceutical companies diversify their export markets and capture additional demand, GlobalData noted in its latest Emerging Market Outsourcing Report. The UK-India Comprehensive Economic and Trade Agreement, which the report states came into force in July 2026, provides Indian pharmaceutical products with duty-free or reduced-tariff access to the UK market. Similarly, India’s trade agreement with New Zealand will remove duties on pharmaceuticals. Meanwhile, the EU-India Free Trade Agreement is expected to improve access to European markets once it takes effect. These agreements could strengthen the competitiveness of Indian drugmakers by reducing trade barriers and creating new opportunities to supply international customers.
Edita Hamzic, healthcare analyst at GlobalData, said, “This is less about India pivoting away from the US and more about its pharmaceutical companies giving themselves more options. As trade tariffs come down in markets such as the UK, Europe and New Zealand, Indian manufacturers have an opportunity to capture a greater share of global pharmaceutical demand.”
CRDMO Sector Creates Additional Growth Opportunities
Beyond finished medicines, India’s contract research, development and manufacturing organisation (CRDMO) sector offers another avenue for international expansion. The sector continues to grow as pharmaceutical companies seek external partners for research, product development and manufacturing. Leading Indian CRDMO companies reported strong double-digit revenue growth in the June 2026 quarter, signalling continued demand for their services. Moreover, India’s established pharmaceutical manufacturing capabilities, technical expertise and competitive operating costs could help domestic companies secure additional international outsourcing contracts. As global pharmaceutical companies reassess their supply chains, Indian service providers have an opportunity to strengthen their position in the global market.
Competition from China Remains a Key Challenge
Despite these opportunities, India faces strong competition from China, particularly in complex biologics. Chinese manufacturers retain significant production scale in this segment, making it difficult for Indian companies to replace them directly. Hamzic said, “India is unlikely to simply replace China, particularly in complex biologics, where Chinese companies retain considerable scale. However, India’s combination of manufacturing experience and competitive costs could help its companies win a larger share of global pharmaceutical manufacturing and outsourcing. The next challenge will be turning improved market access and growing technical expertise into long-term international contracts.”
Indian Pharma Industry Focuses on Global Market Diversification
India’s pharmaceutical industry now has an opportunity to strengthen its global position by combining established manufacturing expertise with improved access to overseas markets. While US tariff uncertainty presents a challenge, new trade agreements and growing demand for outsourced pharmaceutical services could support further export growth. As reported by manufacturingtodayindia.com, sustained success will depend on how effectively Indian pharmaceutical manufacturers convert improved market access, competitive production capabilities and technical expertise into long-term international partnerships.
