In a significant development impacting global pharmaceutical trade, US President Donald Trump declared a 100% tariff on imports of branded or patented pharmaceutical drugs effective October 1, 2025. This move is designed to boost domestic drug manufacturing by incentivizing companies to build production facilities within the United States. India, a leading supplier of pharmaceuticals to the US, particularly branded and generic medicines, is expected to be among the most affected countries.
Key Highlights Of Trump's Tariff Announcement
The 100% tariff will apply from October 1, 2025, strictly on branded or patented pharmaceutical products unless companies have started physically building manufacturing plants in the US.
The definition of "building" encompasses breaking ground or ongoing construction, exempting these products from tariffs if such activities have commenced.
India supplies approximately 45% of the US generic drug market and 15% of biosimilars, making it highly exposed to the new tariffs.
Major Indian pharma firms like Sun Pharma, Dr. Reddy’s, Lupin, and Aurobindo rely heavily on US exports and could face severe revenue and margin pressure.
Generic drugs are currently exempt from this tariff, but uncertainty remains about specialty or complex generics that might be scrutinized in the future.
Implications For India’s Pharmaceutical Industry
India’s pharmaceutical sector is often called the “Pharmacy of the World,” providing a large share of affordable medicines globally. With India exporting over $3.7 billion worth of pharma products to the US in the first half of 2025 alone, the tariff threatens to make Indian medicines substantially less competitive due to doubled costs. This could lead to lost market share, reduced margins, and tighter pressure on Indian drug manufacturers to either localize production in the US or explore other markets.
Broader Trade And Economic Impact
Trump’s tariff aligns with his broader strategy to reduce US reliance on imports, bolster national manufacturing, and address trade deficits. However, experts warn the tariffs may lead to higher drug prices in the US, affect pharmaceutical supply chains, and strain US-India trade relations. The stance also sparks concerns on global drug accessibility and affordability, given the scale of India’s role in the pharmaceutical supply chain.
Sources: NDTV, Bloomberg, Hindustan Times, Economic Times, Business Today
