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- Trump imposed tariffs of up to 100% on branded pharmaceutical imports starting from 1 October 2025
- No tariff applies if firms begin building manufacturing plants in the US before that date
- India supplies 45% of generic and 15% of biosimilar drugs used in the US market
US President Donald Trump on Thursday announced tariffs of up to 100 per cent on imports of branded and patented pharmaceutical drugs, starting October 1, 2025. India's pharmaceuticals sector, one of the most dependent domestic industries on trade with America, could be significantly impacted by the move.
"Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America," the Republican leader said on Truth Social.
Trump's posts showed that his devotion to tariffs did not end with the trade frameworks and import taxes that were launched in August, a reflection of the president's confidence that taxes will help reduce the government's budget deficit while increasing domestic manufacturing.
""IS BUILDING" will be defined as, "breaking ground" and/or "under construction." There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter," he added.
In his latest tariff blitz, Trump also slapped 50 per cent duty on imports of kitchen cabinets and bathroom vanities, 30 per cent on upholstered furniture, and 25 per cent on heavy trucks.
While Trump did not provide a legal justification for the tariffs, he appeared to stretch the bounds of his role as commander-in-chief by stating that the taxes were needed “for National Security and other reasons.”
US President Donald Trump and Indian Prime Minister Narendra Modi met in Washington, DC, on February 13, 2025.
How Could India Be Impacted?
America is India's largest export market for pharmaceutical goods. In FY 24, of India's $27.9 billion worth of pharma exports, 31 per cent or $8.7 billion (Rs 77,138 crore) went to the US, according to the Pharmaceuticals Export Promotion Council of India, an industry body. Another $3.7 billion (Rs 32,505 crore) worth of pharma products were exported in just the first half of 2025.
Per reports, India supplies over 45 per cent of generic and 15 per cent of biosimilar drugs used in the US. Firms like Dr Reddy's, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma and Gland Pharma reportedly earn anywhere from 30-50 per cent of their total revenues from the American market.
Although the latest American tariffs appear to mainly target branded and patented drugs -- a segment dominated by multinational giants -- uncertainty looms over whether complex generics and speciality medicines from India would also be under the scanner. Moreover, large players already have manufacturing facilities in the US.
American consumers depend on low-cost generics manufactured in India. Higher tariffs would lead to price hikes, inflation and drug shortages in the country. Meanwhile, Indian companies, operating on thin margins in the US generics space, may struggle to absorb costs if tariffs are imposed on them, and end up passing them on to US consumers or insurers.
Trump has already slapped 50 per cent tariffs on Indian imports, which also includes a 25 per cent 'penalty' for continued purchase of Russian oil.
