The possibility of U.S. tariffs will create margin challenges for Indian pharmaceutical exporters while promoting growth for Contract Development and Manufacturing Organizations because of evolving supply chain dynamics.

According to Fund Manager Aditya Khemka from InCred Asset Management the U.S. fresh tariff implementation would inflict substantial revenue damage on Indian pharmaceutical exporter margins. According to him the implementation of a 10% tariff against U.S. imports could lead to a 4% decrease in profits for Indian pharmaceutical firms whose business depends heavily on American sales. Generics manufacturers would suffer most from this margin compression since operating with minimum margins is standard practice for them.

The potential growth for Indian Contract Development and Manufacturing Organizations (CDMOs) continues to generate excitement for Khemka because he believes they may grow by 10–12% or possibly achieve 15% growth through expanded capacity. The companies face restrictions regarding price flexibility because of working capital issues and powerful customer negotiating position.

The pharmaceutical industry benefits from multiple revenue sources including India, the Middle East along with Southeast Asian markets when facing uncertainties regarding tariffs according to Khemka. These targeted markets demonstrate solid product requirements which lessen dependence on American customers while protecting firms against geostrategic market threats including the ongoing U.S.-China trade hostilities.

Investors should exercise caution while examining the pharmaceutical sector according to Khemka because they must be careful about their valuations within the CDMO area.