Trump’s 100% tariff on pharma may not impact Indian exporters so soon?

The US decision to impose a 100 per cent tariff on branded and patented pharmaceutical imports from October 2025 is unlikely to affect Indian exports in the near term, according to industry experts. The announcement by President Donald Trump, made via a post on Truth Social, has triggered debate over the impact on global healthcare supply chains. But experts reportedly point out that the measure excludes generic medicines, which form the bulk of India’s pharmaceutical exports to the US.

Tariffs aimed at branded drugs, not generics

“The proposed 100 per cent tariff on branded and patented pharmaceutical imports is unlikely to have an immediate impact on Indian exports, as the bulk of our contribution lies in simple generics,” said Namit Joshi, Chairman of the Pharmaceuticals Export Promotion Council of India (Pharmexcil). He noted that many large Indian firms already operate manufacturing or repackaging facilities in the US, reducing their exposure to the new duties. Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance, reinforced this point: “The executive order refers to patented or branded products supplied to the US. It does not apply to generic medicines.”

India’s critical role in US drug supply

India supplies more than 45 per cent of generic drugs and 15 per cent of biosimilars consumed in the United States, according to Pharmexcil. Generics, used to treat ailments such as diabetes, cancer and cardiovascular diseases, account for a large share of India’s exports. Pharmaceutical exports from India totalled $27.9 billion in FY24, of which $8.7 billion (Rs 77,231 crore) went to the US. In the first half of 2025, exports to the US were valued at $3.7 billion (Rs 32,505 crore). “India has long been a cornerstone of the global supply chain for affordable, high-quality medicines, supplying close to 47 per cent of the US’s pharmaceutical needs, particularly in the generic segment,” Joshi said.

Long-term risks and future strategies

While generics remain shielded for now, industry leaders cautioned that shifting US trade policies could eventually expand to other categories. “Current investigations under Section 232 appear focused elsewhere and have not taken a direct call on generics. Nonetheless, it is prudent to remain prepared for future policy shifts and to build risk-mitigation strategies,” Joshi added. He stressed the need for India to reinforce its competitiveness in bulk drugs and active pharmaceutical ingredients (APIs), while also investing in complex generics, peptides, biosimilars and advanced therapies such as CAR-T treatments. “Generics will remain relevant but will gradually mature; optimising costs and capabilities in these emerging categories will shape the next phase of growth,” he said.

Market reaction and other concerns

Despite reassurances, Indian pharmaceutical stocks fell by up to 5 per cent on Friday, with Sun Pharma, Biocon, Zydus Lifesciences, Aurobindo Pharma, Dr. Reddy’s, Lupin, Cipla and Torrent Pharma among those hit. Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), expressed hope that the tariff measures would not spill over into medical devices.

Experts believe the new tariffs are designed to push multinational firms towards setting up manufacturing facilities in the US rather than to undermine generic drug suppliers. However, they warn that India must remain vigilant. “If tariffs are ever extended to generics, it will directly raise healthcare costs for patients in the US,” Jain cautioned, adding that generics currently make up 90 per cent of prescriptions while accounting for only 13 per cent of the overall US healthcare bill.

With inputs from agencies