Mumbai: A major agreement has been finalised between the United States and the United Kingdom in the pharmaceutical sector. Under this deal, the US will not impose any import tax on medicines made in the UK for the next three years. This means British pharma companies can sell their drugs in the American market without paying any extra tariff, making their products cheaper and more competitive.
Why India Benefits Directly
Many Indian drug companies have manufacturing plants, packaging units, quality-testing labs and distribution hubs in the UK. Because of this, they often use the UK as a route to export medicines to the US.
Now, with the import tax reduced to zero, Indian companies can send medicines from the UK to the US at a much lower cost. Supply chains that earlier required higher expenditure may now become 15–25 percent cheaper. This will help companies increase their profit margins, offer better pricing in the US market and grow their sales volumes.
Indian Companies That Stand to Gain
This agreement is especially helpful for major Indian pharmaceutical names that operate actively in both the UK and US.
Companies like Tata Group’s healthcare units, Dr. Reddy’s Laboratories, Cipla, Aurobindo Pharma, Sun Pharma and Gland Pharma will see immediate cost benefits. Many of their products—whether generic drugs, inhalers, antibiotics or specialty medicines—are processed or packaged in the UK before being shipped to the US.
In addition, Indian API (Active Pharmaceutical Ingredient) manufacturers such as Laurus Labs, Divi’s Labs, Granules India and Biocon also use UK’s regulatory pathway to enter the US market. A zero-tax route gives them cheaper access and better margins.
What the UK Gives in Return
In exchange for this tariff relaxation, the UK government has agreed to increase its spending on medicines through the NHS (National Health Service). This means the government will pay higher prices to drug makers so the pharma sector remains strong and competitive globally.
Although this may put pressure on the UK’s healthcare budget, the government believes it is necessary to protect the country’s pharmaceutical industry.
Why This Deal Matters Globally
The US has often raised concerns over foreign drug pricing. With this agreement, both countries gain stability in their trade relationship for the next three years. For UK companies, the US—one of their biggest export markets—remains open without any extra tariff.
Overall, the deal makes the US–UK pharma trade more predictable, affordable and efficient, while also giving a significant advantage to Indian companies operating through the UK.
