The India–US trade agreement is crucial because it’s not just about improving economic ties but also creating resilient medicine supply chains. As global healthcare faces increasing pressure, especially over access to medicines, the strengthening of trade relations creates opportunities for both India and the US.

India is a leader in pharmaceutical manufacturing, known for producing high-quality generic medicines that treat various diseases at lower costs than branded medicines. With the largest number of manufacturing sites approved by the US Food and Drug Administration outside the US, India plays a crucial role in global pharmaceutical supply chains. The trade agreement with the US enhances access to one of the world’s largest pharmaceutical markets, facilitating the flow of generic medicines and biosimilars, reduction in drug prices, and improved access to essential treatments.

Pharmaceutical exports to the US from India have increased by 20.43 per cent — from $8.73 billion in FY2023-24 to $10.52 billion in FY2024-25. The growth reflects India’s importance in global pharmaceutical markets, especially the US, as a reliable and cost-effective supplier.

India’s regulatory performance further solidifies its position in the US market. In 2025, the highest number of abbreviated new drug applications (ANDAs) went to India-based companies, which accounted for 46.6 per cent of the granted approvals (full and tentative). This highlights India’s cost advantages, regulatory compliance, and expertise in generic drug development and manufacturing.

The Covid-19 pandemic had exposed vulnerabilities in global pharmaceutical supply chains, especially for critical medicines in countries like the US, thereby underscoring the importance of reliable, diversified supply chains. India’s manufacturing capabilities helped mitigate shortages, and the trade agreement ensures future disruptions would be less likely, fostering a stable supply chain.

The trade agreement also enhances regulatory cooperation between the two countries, streamlining the drug approval process and reducing the time and cost associated with bringing drugs to market. This ensures faster delivery of essential medicines to patients.

The recent tariff changes and trade announcements have, however, affected the growth rate. While India’s pharmaceutical exports to the US grew 20.43 per cent in FY2023-24, it was a modest 0.31 per cent increase in the first half of FY2025-26 (valued at about $7.12 billion). The slowdown indicates that the tariff changes and policy fluctuations have created uncertainty.

However, with the trade agreement in place, there is strong optimism that growth will return to double digits in the coming years, ensuring India’s continued role as a key supplier to the US.

By ensuring the continued supply of affordable generics and biosimilars, the India-US trade deal helps address global healthcare challenges and reduce the cost of essential medicines. It is a key step towards a more sustainable global healthcare system, strengthening pharmaceutical supply chains and promoting regulatory cooperation.

While the agreement offers clear benefits, the recent slowdown in growth also highlights the complexities of global trade. But a partnership between the two countries has the potential to boost both economies.

(The writer is Chairman, Pharmaceuticals Export Promotion Council of India. Views are personal

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Published on February 23, 2026