The Indian Pharmaceutical Alliance (IPA) has proposed zero customs duty on US medicine imports to prevent reciprocal US tariffs and maintain India's dominance in the American pharmaceutical market. 

Why is the IPA Advocating for Zero Import Duties? 

• Importance of US Market: The US imports USD 9 billion worth of pharmaceutical formulations from India annually, making up one-third of India's total pharma exports. 
• Zero Import Duties: India has minimized import duties on life-saving medicines. A zero-duty policy helps counter reciprocal US tariffs and safeguard exports. 
  • Lower duties strengthen trade ties and prevent strict US measures against Indian pharma like amending India’s Patents Act, 1970 to dilute its Section 3(d).  
• Amending Patent Act, 1970: The US and other western countries urge India to remove or dilute Section 3(d) of the Patents Act, 1970 which prevents evergreening of patents. 
  • Amending Section 3(d) to allow easier patenting of modified drugs (evergreening of patents) could threaten Indian pharma companies by restricting reverse engineering and delaying generic drug production. 

What is the Status of India's Pharmaceutical Industry? 

• About: India ranks 3rd globally in pharmaceutical production by volume and 14th largest in terms of value, supplying over 50% of global vaccine demand and 40% of generic medicines in the US. 
• Size: India's pharmaceutical market for FY 2023-24 is valued at USD 50 billion, contributing around 1.72% to the GDP, and is projected to reach USD 130 billion by 2030. 
  • India’s biotechnology sector, valued at USD 137 billion in 2022, aims for USD 300 billion by 2030. 
• Key Segments: 
  • Generic Medicines: India is the world’s largest supplier, meeting 20% of global demand. 
  • Active Pharmaceutical Ingredients (APIs): India produces over 500 APIs, contributing 8% to the global API market. 
  • Medical Devices: The market is projected to grow from USD 11 billion to USD 50 billion by 2030. 
• Growth Drivers:  
  • Affordable Pricing: Indian drugs are significantly cheaper than Western alternatives. 
  • Government Support: Policies such as the Production-Linked Incentive (PLI) scheme promote domestic manufacturing. 
  • Strong R&D Base: India has a large pool of scientists and engineers driving innovation e.g., India now ranks 6th globally in terms of patent applications, with 64,480 patent filings in 2023. 
  • Increasing Global Demand: Rising chronic diseases and an aging global population fuel demand for cost-effective medicines. 
• Exports: India exports medicines to over 200 nations, with FY24 exports reaching USD 27.82 billion. 
  • India ranks 12^th globally in medical goods exports, driven by rising demand for biosimilars and specialty drugs. 
• Government Initiatives: Production Linked Incentive Scheme (PLI), Promotion of Bulk Drug Parks Scheme, National Medical Device Policy 2023.