In a dramatic escalation of trade protectionism, U.S. President Donald Trump has announced a 100% tariff on all branded and patented pharmaceutical imports, effective October 1, 2025 — a move that could severely impact India’s $8.7 billion drug export industry.
The tariff will apply unless companies are actively building pharmaceutical manufacturing plants in the United States. The announcement, made via Trump’s social media platform, follows a national security investigation into foreign drug imports launched earlier this year.
What the Tariff Covers
- Scope: Branded and patented pharmaceutical products
- Exemptions: Companies with U.S. manufacturing plants under construction
- Effective Date: October 1, 2025
- Legal Basis: National security provisions under U.S. trade law
Impact on Indian Pharma
India is the largest supplier of generic medicines to the U.S., accounting for nearly 31% of total U.S. drug imports. While generics are not directly targeted, uncertainty looms over complex generics and specialty drugs — segments where Indian firms like Sun Pharma, Dr Reddy’s, Lupin, and Aurobindo have significant stakes.
Analysts warn that:
- Indian drugmakers could lose market share due to price hikes
- Stock volatility may increase, as seen in earlier tariff-related announcements
- Long-term contracts with U.S. buyers may be renegotiated or cancelled
Industry Response
The Indian Pharmaceutical Alliance has urged the Commerce Ministry to seek exemptions or clarifications, while trade negotiators are expected to raise the issue in ongoing bilateral talks.
“This is a wake-up call for Indian pharma to diversify markets and invest in U.S.-based manufacturing,” said a senior executive at a leading drug firm.