Is the 50% Tariff by the US a Poor Policy Decision? India Should Protect Its Farmers, Says SBI Report
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Synopsis
The SBI report warns that the US's proposed tariffs on India could harm American consumers and hinder India's agricultural sector. This analysis reveals the importance of protecting farmers and maintaining affordable medicine access, urging a reevaluation of such policy moves.
Key Takeaways
- US tariffs could harm American consumers and India's farmers.
- India is a key player in global milk production.
- 35% of US pharmaceuticals are supplied by India.
- Shifting manufacturing takes significant time.
- Increased medicine prices impact healthcare expenditures.
New Delhi, Aug 8 (NationPress) The recent imposition of a 25% penalty on goods traded with India, with a potential additional 25% tariff on the world's largest democracy, could be a misguided policy move for the US and its citizens, according to a report by SBI Research released on Friday.
Conversely, India must strategically safeguard its sovereignty by continuing to protect its farmers against the predatory practices of certain global conglomerates. These entities may seek a share of the lucrative 'Desi' market without committing to the development of sustainable market infrastructure, financing the agricultural value chain, or participating in welfare schemes that enhance the ‘Ease of Living’ for our farming community, as emphasized in the report.
Notably, India has outperformed global giants in milk production from 2015 to 2024.
In 2015, India's total milk production was nearly 155.5 million tonnes (EU 154.6 MT and US 94.6 MT). By 2024, India's output increased to 211.7 MT, marking a 36% growth, while the EU (including Britain) reached 165.9 MT and the US 102.5 MT, according to the report.
Moreover, India plays a crucial role in the global pharmaceuticals market, providing affordable and high-quality essential medicines, particularly life-saving oncology drugs, antibiotics, and treatments for chronic diseases.
“In the generic drug market, India fulfills nearly 35% of the pharmaceutical needs of the US. If the US decides to relocate manufacturing and API production to other countries or domestic facilities, it would take a minimum of 3-5 years to establish significant capacity,” the report warns.
In the US, annual health spending per person is approximately $15,000. Therefore, with India's 35% share in generic drug tariffs, the impact on US citizens will be substantial.
“Imposing tariffs on India's pharmaceutical exports undermines the US objective of reducing overall government size and contradicts the goals of DOGE. National health expenditures in the US account for 17.6% of GDP, with government-sponsored Medicare and Medicaid making up 36% of total spending,” the report adds, noting that increased prices for affordable medicines would raise costs under Medicare and Medicaid, as well as out-of-pocket expenses for private citizens.
Point of View
This report underscores the importance of protecting our farmers while advocating for fair trade practices. As India continues to grow as a global leader in agriculture and pharmaceuticals, we must ensure that our policies reflect our commitment to both national interests and international cooperation.
NationPress
08/10/2025
Frequently Asked Questions
What is the impact of US tariffs on Indian goods?
The tariffs could lead to increased prices for consumers in the US, particularly affecting access to affordable medicines and impacting farmers in India.
How much of the US pharmaceutical market does India supply?
India supplies nearly 35% of the US's pharmaceutical needs, particularly in the generic drug market.
What is the significance of India's milk production growth?
India's milk production grew by 36% from 2015 to 2024, surpassing both the EU and US, highlighting its agricultural prowess.
How long would it take for the US to shift pharmaceutical manufacturing?
If the US shifts manufacturing and API production away from India, it would take a minimum of 3-5 years to establish meaningful capacity.
What are the economic implications of increased medicine prices?
Higher prices for affordable medicines would increase expenditures under Medicare and Medicaid, affecting both government spending and private citizens.
