When the US Trump administration unveiled 100% tariffs on branded pharmaceuticals in April 2026, Indian drugmakers heaved a sigh of relief. The duties hit patented medicines, not the low-cost generics that make up India’s commercial stockpile, and the White House has said that dealing with generics and biosimilars would be reassessed only after one year. For now, India’s robust pharmaceutical industry appears immune to tariffs. It is not China-proof, however – and exposure to this is a problem not only for India, but also for its Western partners.
India is, according to the common description, the pharmacy of the world. It supplies nearly 20% of the world’s generic drugs by volume, and by 2022, Indian companies accounted for about 47 percent of all generic prescriptions dispensed in the United States. Indian companies supplied more than half of all U.S. prescriptions in five of the ten largest therapeutic areas, including hypertension, mental health and lipid regulators.
However, this formidable export machine works thanks to borrowed chemistry. Indian sources about 70 percent of its wholesale drug imports from China, and this dependence has, on the contrary, increased in recent years. Chinese suppliers represented about 73 percent of Indian imports of active pharmaceutical ingredients (APIs) in the first half of FY 2026, compared to 68% in FY 2019. For commodities such as paracetamol, penicillin and ibuprofen, China’s share in Indian imports exceeds 90 percent. This dependence is by no means unique to India; China represents approximately 40 percent of the overall API output. The reasons for its success are obvious: China offers greater economies of scale, cheaper energy and effluent treatment, and sustained public support.
India’s dependence on China has geoeconomic implications – and not just for India. Most supply chain risks are mapped bilaterally, as exposure from one country to another. The pharmaceutical chain requires a different geometry, because dependence is transitive. Patients in the US, UK and the Global South rely on Indian formulations, which in turn rely on key raw materials from China. Each link in this chain inherits the vulnerabilities of the one before it.
This means that the United States is exposed to China not only directly, but also through India. Would Beijing restrict exports of APIs or intermediate products – as it has already shown itself willing to do? rare earthsby deploying export controls as policy instruments – disruptions would not be contained in Indian factories. This would impact the US generic system and the UK. National Health Servicewhich depends on India for about a third of its generic drugs. Beijing’s influence over a single upstream node is, in fact, amplified across India’s entire downstream partner ecosystem.
In April 2026, Indian exporters warned of falling stocks of solvents and key raw materials as the crisis in West Asia disrupted trade routes and pushed up petrochemical prices – with the cost of some raw materials rising by 20 to 30 percent before supplies stabilized. India’s pharmaceutical industry and the healthcare of patients around the world are vulnerable to any upstream shock, whether from disruption in freight and energy markets (as we have seen this year) or from future Chinese policies.
Domestically, New Delhi has started to act. THE Production Linked Incentive Program for Bulk Medicines helped to revive the national production of penicillin G and related molecules after an interruption of more than two decadescommissioning capacity for 28 of 41 critical products identified. Progress is real but partial. A base dug for 20 years will not be rebuilt through sales incentives alone, and increased production of Indian APIs has tended to be export-oriented rather than weaning the domestic industry off Chinese inputs.
But India’s API problem is not just about domestic industry, and therefore strengthening India’s self-reliance should be part of its foreign economic diplomacy. Funding India’s API and key raw materials base is how the West can ensure its own pharmaceutical resilience. This is mutual leverage rather than one-way assistance. The same logic should govern critical minerals, solar modules and batteries, where India is again an intermediate node whose Chinese dependencies, if not taken care of, become everyone’s. Co-investment in bulk pharmaceutical parks, joint qualification of non-Chinese sources and shared storage of essential intermediates would transform a private cost for Indian companies into a public good for the partnership.
The timing favors precisely this type of transaction. India has just concluded a historic event free trade agreement with the European Unionis engaged in a more transactional trade route with the United States and building a National Critical Minerals Mission explicitly aimed at reducing dependence on imports. Each of these channels is a natural way to integrate supply chain security through agreements with trusted suppliers, compliance standards and co-financing, rather than relying on industrial policy alone.
The strategic conversation should therefore shift from “India as an alternative to China” to “India as a carrier node with shared vulnerabilities”. For New Delhi, this is a flatter and more sustainable proposition: its pursuit of autonomy in strategic inputs is not a parochial industrial policy but a contribution to the security of the allied supply chain.
For India’s partners, the uncomfortable truth is that they cannot protect themselves from China through India as long as India remains committed to China. A tariff wall can prevent the entry of a finished pill, but cannot prevent the entry of the chemicals it contains.