The US has recently imposed a 26% tariff on medical devices imported from India, marking a significant increase from the previous range of 0-6%. This move could severely impact the Indian medical device industry, which is still developing. While India exports medical devices worth $714.3 million to the US, it imports $1,519 million worth of similar products from the US, highlighting a considerable trade deficit.

The tariff on Indian devices is lower than the 34% imposed on Chinese imports, giving India a slight price advantage. However, this may not translate into substantial benefits, especially for low-risk, high-volume consumables. Additionally, there are concerns that competitors may bypass the tariffs by routing products through countries like the UK or UAE, which have lower duties.

Apart from tariffs, Indian medical devices face non-tariff challenges, such as the high cost of obtaining US FDA approvals, ranging from $9,280 to over $540,000. In contrast, US exporters face relatively minimal costs when entering the Indian market.

Meanwhile, Indian pharmaceuticals are exempt from these tariffs, as the US heavily relies on them, with Indian companies supplying 47% of all generic medicines prescribed in the country. In 2022, Indian medicines contributed to $219 billion in savings for the US healthcare system. This exemption offers significant relief to Indian pharma manufacturers, given that the US is their largest market, accounting for over 31% of exports in 2024.