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India's Medical Device Exports to US Hit by 26% Reciprocal Tariff: AiMeD Raises Concerns

New Delhi: The imposition of a 26% reciprocal tariff by the United States on Indian medical device exports has raised serious concerns within the industry, with stakeholders warning of potential setbacks to India's ambitions in global markets.
“The imposition of a 26% reciprocal tariff on Indian medical device exports to the U.S. may pose a significant challenge to the sector's growth. Historically, India has been a key supplier of cost-effective, high-quality medical devices to the U.S., primarily in low-value high-volume consumables categories. However, this new tariff may possibly impact Indian Medical Devices exports and we have to explore windows of opportunities where USA has been seeking to diversify its supply chain dependence on any one nation,” stated Mr Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD).
In 2023-24, India’s medical device exports to the U.S. were valued at $714.38 million, while imports from the U.S. into India stood significantly higher at $1,519.94 million, according to data shared by the Export Promotion Council of Medical Devices.
Comparative Tariff Rates on Medical Device Exports to U.S.:
India: 26%
China: 34%
Europe: 20%
Vietnam: 46%
Taiwan: 32%
Japan: 24%
South Korea: 25%
Switzerland: 31%
Indonesia: 32%
Malaysia: 24%
Turkey: 10%
Despite the tariff hurdles, some Indian companies see limited price advantages.
“While India may seemingly gain a marginal price advantage over China (8%) in certain low-risk, high-volume consumables, the real impact may not be significant if our prices were higher than 15% and the impact has to be further studied compared to other competing nations,” stated Mr Himanshu Baid, Managing Director, Polymedicure.
He added that regulatory barriers in the U.S. present even greater challenges than tariffs.
“Despite the tariff challenges, India's primary obstacle remains non-tariff barriers rather than tariffs themselves. Regulatory hurdles in the U.S. are steep, with FDA approval costs ranging from $9,280 to over $540,000, whereas U.S. exporters face relatively minimal costs when entering India. Addressing these imbalances through bilateral collaboration is crucial.”
Industry leaders are calling for strategic intervention by the Indian government.
“As emphasized by our Hon’ble Prime Minister, India must prioritize healthcare security by strengthening domestic manufacturing and reducing dependency on foreign markets,” stated Nath.
“We request Government of India’s support in bilateral negotiations for a balanced approach to tariffs and regulatory policies as an essential requirement to position India as a competitive global player in the medical device industry,” he added.
AiMeD emphasized that the path forward lies in fair-trade mechanisms.
“These high tariffs imposed by USA will definitely provide protection to US-based manufacturers to the medical device industry there and give them an overnight boost to maximise capacity utilisation and expansion for capturing a higher market share in their domestic market. These high Tariffs coupled with the non-tariff barriers to access private healthcare market by way of US FDA regulations and the Buy American policy for their Government procurement will possibly make USA less attractive for marketing and more attractive as an investment proposition in some products. However there are many products in low risk, low priced high volume consumables and disposables where manufacturing had pretty much been reduced in USA to a negligible level and manufacturing operations moved to Mexico, Puerto Rico, Ireland etc where it may take 3–5 years or even longer for manufacturing capacity to move back to USA. It’s in these products that Indian manufacturers will find a natural competitive advantage to some level in the short – medium term. Maybe India needs to learn from USA on driving investments into manufacturing ”
A new concern flagged by Indian exporters is the misuse of third-country routing to bypass U.S. tariffs.
“The biggest fear for Indian exporters being communicated to me will be the 3rd country routing of exports to USA with 10% duty like UK and UAE by competing nation’s manufacturers like China as was already being done.”
On the question of the path forward in light of the U.S. Trade Representative’s (USTR) tariffs, AiMeD suggested a multi-pronged approach.
“India's response to the Trump reciprocal tariff of 26% should be multi-faceted.
Overall, India's response to the Trump reciprocal tariff of 26% should be focused on promoting domestic manufacturing, diversifying exports to countries other than USA, improving trade infrastructure, reducing inward freight haulage costs and engaging diplomatically with USA for a win-win collaboration,” stated Mr Rajiv Nath of AiMeD.
Farhat Nasim joined Medical Dialogue an Editor for the Business Section in 2017. She Covers all the updates in the Pharmaceutical field, Policy, Insurance, Business Healthcare, Medical News, Health News, Pharma News, Healthcare and Investment. She is a graduate of St.Xavier’s College Ranchi. She can be contacted at editorial@medicaldialogues.in Contact no. 011-43720751