Trump's 'Make in America' push: Indian drug cos in no rush to make US shift

Pharma industry veteran said that the US wanting to encourage local production is a very natural thing to do

United States (US) President Donald Trump’s executive order to promote domestic drug manufacturing and cut approval timelines for pharmaceutical plants is unlikely to have a direct impact on Indian exporters, according to industry executives and analysts. 

Several senior pharma executives said decisions to expand US manufacturing footprints were strategic and would depend on specific products. The chief financial officer (CFO) of a major Indian drugmaker who did not wish to be named said high-margin products, or those developed and marketed in partnership with US firms or acquired from local players, might warrant consideration for American production. “This decision would vary from one company to another and also from product to product. It is all a question of viability,” said the executive, adding his company had no immediate plans in that direction.

  A pharma industry veteran said the push for local production in the US was a “natural thing to do”. “Every country would want to create jobs and boost local industries. I don’t see this impacting Indian exporters as such. We will take calls based on viability to shift production to the US,” he said.

  Trump’s order instructs the US Food and Drug Administration (FDA) to “streamline” reviews and assist domestic manufacturers in early stages of plant development. It also calls for stricter enforcement of reporting on active-pharmaceutical-ingredient sources for foreign producers. 

  The Environmental Protection Agency has been asked to expedite facility construction. The order cited industry estimates that building new pharmaceutical capacity could take 5-10 years – an “unacceptable” timeline from a “national security” standpoint.

Reuters reported FDA Commissioner Marty Makary as saying that the agency would begin surprise inspections of overseas plants to bring enforcement in line with domestic standards.

  Indian pharma stocks slid following the announcement. Aurobindo Pharma fell 2.5 per cent on the BSE, while the Nifty Pharma index dropped 1.1 per cent on Tuesday.

  Uday Bhaskar, former director general of Pharmexcil, said he did not expect any immediate impact on Indian exporters. “What I understand is that Trump is trying to encourage domestic pharma firms with overseas plants — in Ireland, Germany, etc — to bring production home. The US imports almost 80 per cent of its active ingredients. It would seek to have more self-reliance. The US imports $200 billion worth of prescription drugs annually; India contributes just $10 billion in mostly generics. Hence, we don’t expect much impact,” he said.

  Several multinationals — including Roche, Novartis, Eli Lilly, and Johnson & Johnson — have announced fresh investments in US manufacturing in recent weeks.

  But cost will be a key factor for Indian firms contemplating US manufacturing. Sharvil Patel, managing director (MD) of Zydus Lifesciences, recently told Business Standard that while distributed manufacturing was becoming reality, “a large part of manufacturing will be in India because the first principle is to make affordable medicines. India offers the most cost-competitive capability for manufacturing.” India will remain the fulcrum of production, he added.

  Nirali Shah, pharma analyst, institutional research, Ashika Group, said large Indian firms already had a global footprint, and any renewed “Buy American” push could prompt a review of US-based strategies. “Collaborations or targeted acquisitions may be explored as potential options, given they offer a less capital-intensive route compared to setting up new manufacturing facilities. However, much will depend on how policy details evolve and the economic viability of such moves,” she said.

  Vishal Manchanda, senior vice-president, research, Systematix, said unless regulatory easing was backed by financial incentives, Indian companies were unlikely to shift production. “They can selectively do so for products where it might make sense,” he said.

  Some Indian drugmakers are already exploring capacity expansion in the US. Glenmark is looking to get its injectables facility in Monroe, North Carolina, back on track in FY26, and is open to expanding it further. The site had received a warning letter from the FDA in 2023.

  Its chairman and MD, Glenn Saldanha, said in a recent Business Standard interview that the company had “significant benefits flowing through” the Monroe facility. Depending on how the environment evolves, the company is “happy to look at further expanding our Monroe site,” he had said. The facility manufactures injectables — a segment facing shortages in the US — and provides a “differentiated” offering. “It could clearly assist the American consumer, and could fit well into the current narrative of ‘Make in America’,” Saldanha had said.