Donald Trump’s latest tariff salvo has raised fresh concerns in Indian trade circles, with pharmaceuticals and copper exporters facing the prospect of punitive duties unless a bilateral trade deal is struck by August.
The United States President on Monday unveiled a 50 per cent import tariff on copper, effective August 1, and warned of tariffs on pharmaceuticals reaching as high as 200 per cent within the next year. These moves are part of a broader protectionist push that includes levies on semiconductors and critical minerals.
Addressing a Cabinet meeting at the White House, Trump said, “We’re going to give people about a year, a year and a half to come in, and after that, they’re going to be tariffed. They’re going to be tariffed at a very, very high rate, like 200 per cent.”
India, a major exporter in both sectors, could find itself on the frontlines of this policy shift.
Copper, though important, constitutes a smaller trade concern. India exported around $2 billion worth of copper and related products in the last financial year, of which roughly $360 million was destined for the US. Though the US is India’s third-largest copper market after Saudi Arabia and China, analysts believe the impact may be contained due to the metal’s wide global demand and growing domestic use in sectors like construction and renewable energy.
Pharmaceuticals, however, present a graver concern. India exported $9.8 billion worth of pharmaceutical products to the US in FY25, accounting for nearly 40 per cent of its total pharma exports. Much of this comprises low-cost generic drugs that are vital to the US healthcare ecosystem.
A 200 per cent tariff would likely price these products out of the American market. The highly cost-sensitive generics industry is unlikely to absorb the added burden, potentially forcing firms, especially small- and medium-sized ones, to withdraw.
Also read: Trump threatens extra 10 pc tariff on BRICS members
The effects were swiftly felt on the bourses. Pharma stocks dipped by 2 to 4 per cent during intraday trading as investors reacted to Trump’s announcement. Industry leaders have begun calling for urgent intervention.
Trade negotiations between India and the United States are ongoing. Trump struck a mixed tone on this front: “We’re close to making a deal with India. Others we met with and we don’t think we’re going to be able to make a deal, so we just send them a letter.”
The US has reportedly sent formal tariff letters to countries including Bangladesh, Cambodia, Japan, South Korea and South Africa. India has not yet received such communication, suggesting talks are at a more advanced stage.
The pharmaceutical industry, already under pressure from regulatory scrutiny and pricing controls, may look at relocating parts of its manufacturing to the US. However, such moves entail high capital investment and protracted compliance hurdles. Smaller exporters may not be in a position to pursue such options, making government-level engagement vital in the weeks ahead.
The announcement also comes on the heels of Trump’s BRICS remarks. Describing the bloc as “not a serious one”, he nevertheless reaffirmed his stance that imports from BRICS countries could face a flat 10 per cent tariff. India, a key BRICS member, may thus face further pressure depending on the geopolitical trajectory.
Industry associations in India are expected to petition for phased implementation or exemptions, particularly for essential medicines. Simultaneously, efforts are underway to diversify exports to markets in Latin America, Africa and Southeast Asia, as part of a long-term hedging strategy.
While the copper blow may be absorbed, it is the pharmaceutical pinch that New Delhi is least prepared to endure.
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