US President Donald Trump announced a 100% tariff on branded and patented pharmaceutical imports into the United States, effective October 1, 2025. This decision aims to boost domestic drug manufacturing, but it represents a significant challenge for Indian pharmaceutical companies, which supply over a third of the U.S. generic drug market.
Impact on Indian Drugmakers
Major Indian firms such as Sun Pharma, Cipla, and Dr. Reddy’s Laboratories have already seen their stock prices dip by up to 5% following the announcement. While generic drugs remain exempt for now, industry experts warn that the uncertainty surrounding future tariffs on complex generics, biosimilars, and specialty drugs could create long-term challenges for Indian exporters.
U.S. Policy Goals
The Trump administration claims the tariffs are designed to strengthen domestic manufacturing capabilities and reduce reliance on foreign suppliers for essential medications. The move also aligns with broader trade protectionist policies aimed at shoring up the U.S. pharmaceutical industry.
Challenges for India
India’s pharmaceutical sector, valued at $45 billion in exports, relies heavily on the U.S. market, which accounts for nearly one-third of global generic drug imports. Analysts say that a 100% tariff could:
Dramatically reduce Indian drug exports to the U.S.
Increase production costs for American healthcare providers and patients.
Push Indian companies to diversify markets or invest in local U.S. production to bypass tariffs.
Industry Response
Industry bodies, including the Pharmaceutical Export Promotion Council of India (Pharmexcil), have expressed concern, calling for diplomatic engagement and dialogue to mitigate the economic impact. Many Indian companies are exploring strategic partnerships or manufacturing facilities in the U.S. to maintain their market presence.
Looking Ahead
While the tariff targets branded and patented drugs, the policy introduces uncertainty for Indian companies supplying complex generics and biosimilars. Experts predict that Indian firms may need to restructure global supply chains and explore alternative international markets to offset potential losses.
“This is a challenging but manageable situation,” said a senior industry official. “Indian drugmakers are resilient, and strategic adjustments can help maintain our global footprint.”
