US President Donald Trump announced the imposition of tariffs reaching up to 100 per cent on imports of branded and patented pharmaceutical drugs, effective from October 1. This move is poised to significantly affect India’s pharmaceuticals sector, which relies heavily on exports to the United States, one of its largest markets.
In a post on his social media platform Truth Social, the Republican leader stated, "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."
This announcement underscores Trump’s ongoing commitment to protectionist trade policies, extending beyond the import taxes and trade frameworks he introduced in August 2025. The president views these tariffs as a tool to shrink the US government’s budget deficit while promoting domestic manufacturing and job creation.
Trump provided further clarification on the exemption criteria, writing, ""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." Although he did not cite a specific legal basis for the tariffs, Trump justified the measures by invoking his authority as commander-in-chief, asserting they were essential “for National Security and other reasons.”
In this latest wave of tariffs, Trump also targeted other sectors, imposing a 50 per cent duty on imports of kitchen cabinets and bathroom vanities, a 30 per cent tariff on upholstered furniture, and a 25 per cent levy on heavy trucks. These actions build on his administration’s aggressive trade agenda, which has already included 50 per cent tariffs on various Indian imports, incorporating a 25 per cent “penalty” for India’s continued purchases of Russian oil.
Potential Impact on India
The United States serves as India’s premier export destination for pharmaceutical goods, making the sector particularly vulnerable to these new duties. According to data from the Pharmaceuticals Export Promotion Council of India (Pharmexcil), an industry body, India exported $27.9 billion worth of pharmaceutical products in FY 2024, with 31 per cent—or $8.7 billion (approximately Rs 7,72,31 crore)—directed to the US market. This trend continued into 2025, with an additional $3.7 billion (Rs 32,505 crore) in pharma exports to the US recorded in the first half of the year alone.
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India plays a crucial role in the US healthcare supply chain, providing over 45 per cent of the generic drugs and 15 per cent of biosimilar drugs consumed there. Major Indian companies such as Dr. Reddy’s Laboratories, Aurobindo Pharma, Zydus Lifesciences, Sun Pharmaceutical Industries, and Gland Pharma derive 30 to 50 per cent of their total revenues from the American market, per industry reports. These firms operate on slim margins in the generics segment, where competition is intense.
While the tariffs primarily target branded and patented drugs—a domain largely controlled by multinational corporations—there remains considerable uncertainty about whether they could extend to complex generics or speciality medicines exported from India. Analysts suggest that broadening the scope could disrupt supply chains and force Indian exporters to reassess their strategies.
For American consumers, who rely on affordable Indian generics to keep healthcare costs in check, the tariffs could trigger price increases, exacerbate inflation, and lead to potential drug shortages. Indian manufacturers, already navigating thin profit margins, may find it challenging to absorb the additional costs. As a result, they could pass them on to US buyers or insurers, ultimately raising expenses for patients and healthcare providers. This could strain bilateral trade relations, given India’s pivotal position in ensuring access to low-cost medications in the US.
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