By Jashaswi Ghosh (July 23, 2025 – Originally on Law360)

In recent years, pharmaceutical supply chain vulnerabilities have become increasingly visible, prompting a stronger push from the U.S. government to localize the production of critical drugs.

Among the boldest moves in this direction is the renewed commitment to onshoring essential medicine manufacturing, a step framed as both a national security imperative and a strategic economic adjustment in President Donald Trump’s May 5 executive order on promoting domestic production of medicine.[1]

With India playing a pivotal role in the global pharmaceutical ecosystem, especially in the manufacturing of generics and active pharmaceutical ingredients sectors, this shift raises important questions about its future role in U.S. drug supply chains.

Recalibrating for Resilience: The U.S. Onshoring Agenda

The executive order signals a major shift in the U.S. approach to drug manufacturing.[2] Building on earlier orders, it directs federal agencies to accelerate the approval and construction of domestic pharmaceutical production facilities by removing redundant regulations and cutting through bureaucratic delays.

The initiative aims to reduce dependency on foreign sources for vital drug components by promoting domestic capacity building. Agencies like the U.S. Food and Drug Administration and U.S. Environmental Protection Agency have been tasked with streamlining permitting processes and modernizing inspection protocols. This is more than just a technical adjustment; it reflects a broader philosophy that prioritizes resilience and national control over supply chain cost-efficiency.

Implications for India

These policy changes are particularly impactful for and relevant to India — a country that houses the world’s largest number of FDA-approved facilities[3] outside the U.S. and that has been instrumental in supplying affordable generics to American consumers.

India, often referred to as the pharmacy of the world, is the largest supplier of generics sold worldwide.[4] This prominent position stems from the country’s strength in producing affordable, high-quality pharmaceuticals at scale.[5] Yet, its very success places it under new scrutiny as the U.S. pivots to boost its local manufacturing footprint.

Another critical part of the recent policy includes expanding the FDA’s unannounced inspection program at foreign manufacturing sites. Traditionally, overseas plants have been given advance notice of inspections, unlike domestic facilities, which face surprise audits.[6] The new rules aim to level the playing field by applying the same degree of inspection rigor globally.

It is worth highlighting that the FDA has previously also faced sustained criticism from lawmakers regarding persistent backlogs in foreign drug facility inspections, delays in

implementing unannounced visits and ongoing staffing shortages for overseas inspection roles.[7]

Congress included a $10 million allocation in the fiscal year 2023 omnibus spending bill, signed by President Joe Biden, to fund a pilot program aimed at expanding the agency’s use of unannounced surveillance inspections at foreign pharmaceutical sites.[8]

The FDA’s long-standing practice of notifying overseas manufacturers well in advance of inspections has sparked concern over the credibility and effectiveness of such visits, particularly when firms have ample time to prepare for regulatory scrutiny.[9]

As a direct impact of this new policy directive, Indian manufacturers are likely to face more frequent, unscheduled inspections with stricter compliance checks. This is particularly significant in light of past quality concerns, ranging from data integrity issues to contamination lapses.[10] As the regulatory bar rises, maintaining a proactive stance on documentation and quality assurance becomes essential for India’s manufacturers and exporters.

Regulatory Ambition Versus Capacity Constraints

While the push to bring drug manufacturing back to U.S. soil is ambitious, execution remains a tall order. Setting up new pharmaceutical facilities can take years, due to challenges ranging from site approvals and environmental reviews to workforce shortages.[11] Even retrofitting existing infrastructure comes with time-consuming hurdles.[12]

Prominent industry leaders within the pharmaceutical sector have noted that establishing a new manufacturing facility in accordance with FDA-mandated quality standards is a complex, multiyear undertaking. They have expressed doubts regarding whether the recent executive order will substantially accelerate these lengthy timelines, given the stringent regulatory environment.[13]

This reality means that international partners like India will remain integral to the U.S. drug supply for the foreseeable future, despite the goal of reducing dependence. However, this continued reliance will come with higher compliance expectations and more rigorous oversight.

Further, the success of expanded foreign inspections depends on the FDA’s operational readiness — a serious concern, given the agency’s current resource constraints. The FDA’s recent staffing cuts, loss of experienced personnel and disbanding of key support teams have created systemic delays in inspection and enforcement.[14]

Although core inspectors have largely been retained, the supporting infrastructure they rely on, including logistics, translators and schedulers, has been thinned. Investigators have reported being stretched thin, especially when coordinating complex overseas visits with minimal support.[15] This limits the FDA’s ability to maintain the very oversight it seeks to intensify.

The agency’s recent efforts to deploy AI tools for inspection targeting[16] and to bring back some laid-off personnel are steps in the right direction. But a full recovery will take time, raising questions about how effective the inspection surge can be in the short term.

India’s Strategic Imperatives

For India’s life sciences industry, the evolving U.S. landscape presents both a challenge and a strategic opening. Companies that can demonstrate consistent compliance with FDA standards, especially under unannounced inspection conditions, will be well positioned to retain or even expand their share of the U.S. market.

Investing in audit-readiness, digitized quality management systems and stronger regulatory affairs teams can go a long way. This policy shift creates a significant opportunity for collaboration between U.S. and Indian law firms.

By actively engaging in ongoing FDA policy discussions, Indian manufacturers can strengthen their compliance frameworks, anticipate regulatory changes and ultimately secure a lasting competitive advantage in the global pharmaceutical market.

Conclusion

The drive to onshore the production of critical medicines forms part of a broader effort by the U.S. to recalibrate global pharmaceutical supply chains and reassert autonomy over key public health assets.

However, the ambition behind this shift must currently navigate significant practical limitations. India, given its established credibility and robust capabilities as a pharmaceutical exporter, remains an indispensable ally during this transition.

Companies in India that proactively enhance compliance frameworks, swiftly adapt to heightened regulatory scrutiny and prioritize quality assurance stand poised not only to navigate this evolving landscape successfully, but also to emerge strategically stronger and more resilient.

Jashaswi Ghosh is counsel at Holon Law Partners LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

1. https://www.whitehouse.gov/presidential-actions/2025/05/regulatory-relief-to-promote- domestic-production-of-critical-medicines/.
2. ID
3. https://www.bain.com/insights/healing-the-world-a-roadmap-for-making-india-a-global- pharma-exports-hub/.
4. ID
5. ID
6. https://www.raps.org/news-and-articles/news-articles/2025/5/fda-to-expand- unannounced-foreign-inspections-afte.
7. https://www.raps.org/news-and-articles/news-articles/2024/2/lawmakers-voice- concerns-over-fda%E2%80%99s-foreign-inspec.
8. https://www.congress.gov/117/bills/hr2617/BILLS-117hr2617enr.pdf.
9. https://www.raps.org/news-and-articles/news-articles/2023/1/omnibus-spending-bill- expands-fdas-unannounced-for.
10. https://www.pharmamanufacturing.com/all-articles/article/55282739/10-companies- hit-by-fdas-2025-inspection-crackdown.
11. https://www.reuters.com/business/healthcare-pharmaceuticals/pharma-industry- lobbies-trump-phased-tariffs-sources-say-2025-04-01/.
12. https://www.pharmaceutical-technology.com/analyst-comment/us-pharma-trump- industry-doubts/?cf-view&cf-closed.
13. https://www.reuters.com/business/healthcare-pharmaceuticals/novo-nordisks-cfo- sceptical-trump-executive-order-drug-manufacturing-can-cut-2025-05-07/.
14. https://www.raps.org/news-and-articles/news-articles/2025/5/fda-to-expand- unannounced-foreign-inspections-afte.
15. https://www.propublica.org/article/fda-cuts-drug-factory-inspections.
16. https://www.fda.gov/news-events/press-announcements/fda-launches-agency-wide- ai-tool-optimize-performance-american-people.