On Friday, September 26, 2025, US President Donald Trump announced a 100% tariff on pharma products, which will take effect from October 1, 2025.
“I’m putting a 100% import tax on pharmaceutical drugs unless the companies are building plants right here in the United States,” said Trump.
How will it impact India?
India supplies a significant share of medicines consumed globally because India is one of the world’s largest suppliers of medicines (Indian drugs and pharmaceuticals accounted for roughly USD $ 21–28 billions of exports in recent accounting periods). And Trump announced a 100% tariff on pharmaceutical products. The announcement immediately raised questions in New Delhi and across the Indian pharma sector because India exports over one-third of the drugs consumed in the US (valued at approximately $10.5 billion in FY24, out of that- exports of generic formulations are about US$8.7 billion). This dependence has grown, with the US relying on India for a large portion of its medicine imports, which include generic drugs, vaccines, and active pharmaceutical ingredients.
How significant is the risk to which Indian companies are exposed, and what practical steps should exporters and policymakers take?
Let’s look at the answers to all the questions.
The medicines/drugs India produces for the US are mostly generic. Generic drugs are those that are no longer under patent and are generally cheaper than their branded counterparts. Their implications are almost the same as in the branded one, but in the patent one, the quantities are simplified and classified. In general, the method varies depending on the procedure used, which is based on the amount of chemicals used.
The tariff Trump imposed is on the branded version, not on generic drugs. That’s why, according to experts/researchers, India, being a major exporter of generic drugs, is unlikely to have an immediate impact in the short run.
Who will be directly hit?
Branded, on-patent drugs imported into the US are the explicit target. That means many of the high-priced patented medicines from multinational innovators could be affected.
Economic effects — who bears the cost?
In practice, importers, distributors, or US consumers often absorb tariffs (through higher prices downstream). If the tariff is enforced and not absorbed by foreign exporters, US pharmaceutical distributors or insurers could face higher input costs, which would likely be passed on to payers and patients. However, for patented branded drugs, the supply chain and pricing dynamics are complex; manufacturers may choose to relocate some manufacturing, absorb margins, or pass through costs, depending on the contracts and market power.
Conclusion
In conclusion, since India is primarily exporting generic drugs to the U.S., the current situation is largely unaffected for the Indian pharmaceutical sector in the short run. For U.S. consumers, Indian-exported medicines remain available at comparatively lower prices despite the tariffs. This is why the U.S. continues to look towards India as a strong partner in the pharmaceutical manufacturing sector, where multiple opportunities still exist.
If you are also looking to expand into India and would like to learn more about this tariff update, please contact us for further details.
Source: Trump’s 100% tariff on branded pharma drug imports: Should India worry?
TOI