New Delhi recently voiced strong concerns over the US President’s announcement of a 25% trade tariff and additional penalties. Consequently, Indian medical device manufacturers call this move troubling and shortsighted. These new measures are set to significantly impact the nation’s healthcare landscape. [1]
Understanding the New US Tariffs on Indian Medical Devices
President Donald Trump, in a Truth Social post, declared that India will face a “25 per cent” tariff plus an additional “penalty” starting August 1. [1] He alleged that India imposes some of the highest tariffs globally and has strenuous non-monetary trade barriers. [1] Previously, tariffs on medical devices from India ranged between 0 and 6%, mostly near zero. [3, 5] Therefore, this new 25% tariff represents a sharp escalation. [3, 4] This measure pushes import duties on the Indian medical device industry to as high as 35%, including the existing 10% base duty. [1]
Significant Impact on India’s Medical Device Sector
India’s medical device sector relies heavily on imports, with approximately 80-85% of its total device requirements met through foreign sources. [1] US-based companies hold a substantial share of these imports. [1] For instance, in FY 2023-24, India exported $714.38 million worth of medical devices to the US, but imported more than double that amount, at $1,519 million. [1, 3, 4, 5, 7, 9] Consequently, the new tariff gravely impacts the cost-competitiveness of Indian MedTech exports, particularly affecting crucial low-value, high-volume consumables. [4, 5]
Industry Voices Decry US Medical Device Tariffs
Pavan Choudary, Chairman of MTaI, criticized the US decision, labeling it economically shortsighted and strategically misguided. [1] He emphasizes that such actions target partners, not rivals, potentially shifting Indo-US ties from cooperation to caution. [1] Furthermore, he stated that attempting to punish a sovereign nation’s independent choices through coercive trade measures is inappropriate and counterproductive. [1] Rajiv Nath, Forum Coordinator of AiMeD, an Indian device makers’ body, similarly suggests that these steep tariffs will protect US-based manufacturers. [1, 5] This could potentially reverse investments into the US for products where Indian players previously held a competitive advantage. [1]
Addressing Non-Tariff Barriers and Regulatory Hurdles
Beyond the direct tariffs, non-tariff barriers remain a significant challenge for Indian medical device exporters. [3, 5, 7, 8] The US Trade Representative (USTR) previously outlined certain compliance requirements in India as burdensome. [1, 10] Conversely, the US Food and Drug Administration (FDA) imposes stringent regulatory hurdles, making it costly for Indian manufacturers to enter the US market. [3, 5, 6, 7] FDA approval costs range from $9,280 to over $540,000, while US exporters face minimal costs in India. [5, 7] Therefore, addressing these imbalances through bilateral collaboration is crucial for fair trade. [5, 7]
Path Forward: Diplomacy and Domestic Strengthening
The Union Commerce Ministry has noted that the government is studying the implications of the US President’s statement on bilateral trade. [1] They will take all necessary steps to secure national interest. [1] Additionally, India and the US have engaged in multiple rounds of talks to discuss sectoral trade terms. [1] There is ongoing discussion about India potentially lowering tariffs on US medical devices in exchange for reciprocal treatment for Indian pharmaceutical products, including generics. [6, 10, 13, 14] Ultimately, the medical device industry in India requires governmental support in bilateral negotiations for a balanced approach to tariffs and regulatory policies to secure its global position. Explore pharmacy specialty courses.
References
- Med Device makers decry US Tariffs as Troubling, Shortsighted – ETHealthworld.
- USITC’s – US-India Trade Tensions and Medical Devices. U.S. International Trade Commission.
- Will US tariffs hit the medical device industry in India? Here’s decoding the ripple effect. The Indian Express. April 6, 2025.
- How US tariffs are going to affect MedTech industry in India. Mojo4Industry. May 3, 2025.
- Impact of reciprocal tariff levy on India’s medical device sector. Express Healthcare. April 3, 2025.