Why US Reliance on Indian Generic Drugs is Unavoidable: Insights from Natco Pharma CEO Rajiv Nannapaneni

Hyderabad: Rajiv Nannapaneni, the CEO of Natco Pharma, believes the Indian pharmaceutical sector is well-positioned despite new trade tariffs from the US. The US relies heavily on Indian generic drugs, consuming around 92% of them.

Nannapaneni pointed out that many countries, including the US, are shifting toward self-reliance. This trend isn’t new; countries have been working on it for quite some time. Unlike sectors like shrimp and textiles, the pharmaceutical field is less affected by tariffs because there are few alternatives to Indian medicines. “America cannot afford to ignore Indian drugs,” he said, highlighting the challenge of producing medicines locally.

Recently, the US imposed a $100,000 fee on new H-1B visas, which could hinder Indian workers and companies. Nannapaneni suggested we look at this from another angle. Globalization has not always benefited the working class, especially in the West, where white-collar jobs dominate. Meanwhile, the income levels for many have declined. He argued that Trump’s decisions should be viewed within this larger context.

Historically, the US has represented about 50% of trade for Indian companies. Nannapaneni emphasized that while India is diversifying its market, it cannot ignore the significance of the US market. “The US remains the largest consumer of our products,” he explained.

He believes Indian companies should now focus on expanding into new markets while strengthening their existing presence in places other than the US. Many countries are upping their production capabilities to reduce reliance on imports. This global shift is something Indian businesses need to consider as well. For Nannapaneni, the traditional model of producing low-cost drugs for global export may need reevaluation.

Natco Pharma is already adapting its strategy. The company invested in a South African firm for ₹2,000 crore and is eyeing markets in Brazil and Canada. “If we don’t innovate our approaches, long-term survival could be challenging,” he warned.

There are hopeful signs of negotiations regarding the tariffs. Both sides appear ready to talk, which might lead to solutions. Nannapaneni remains optimistic about finding a way forward for the sector.

Overall, the landscape for Indian pharma is changing rapidly. Companies need to be agile, forward-thinking, and ready to adapt to maintain their competitive edge.

For further insights into globalization’s impact on the workforce, you can check an analysis by the International Labour Organization.

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DONALD TRUMP, US TRADE TARIFF, NATCO PHARMA, GENERIC MEDICINE, INDIAN PHARMA SECTOR, US HAS NO ALTERNATIVE TO INDIAN GENERIC DRUGS: NATCO PHARMA CEO RAJIV NANNAPANENI