US President Donald Trump on Thursday (September 25) escalated his protectionist trade agenda by announcing a 100% tariff on imports of branded and patented pharmaceutical products, effective October 1, 2025. The move, pitched as a push to force foreign companies to manufacture in America, could have far-reaching consequences for India’s $27.9 billion pharmaceutical export industry.
“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,” Trump posted on Truth Social. He clarified that “IS BUILDING” would mean “breaking ground” or “under construction,” exempting products from firms already setting up facilities in the US.
This latest tariff salvo follows earlier duties imposed in August and underscores Trump’s belief that higher import taxes will cut deficits and drive domestic manufacturing. Alongside pharma, Trump also announced 50 per cent duties on kitchen cabinets and bathroom vanities, 30 per cent on upholstered furniture, and 25 per cent on heavy trucks, citing “national security and other reasons.”
India’s Stakes in the Game
The United States is India’s largest pharmaceutical export market, absorbing 31 per cent ($8.7 billion) of exports in FY24 and another $3.7 billion in the first half of 2025, according to the Pharmaceuticals Export Promotion Council of India. Indian firms supply 45 per cent of generics and 15 per cent of biosimilars consumed in the US.
Industry leaders including Dr. Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma, and Gland Pharma derive between 30–50 per cent of their revenues from the American market. While Trump’s measures appear targeted at branded and patented drugs a segment dominated by multinational majors uncertainty looms over whether complex generics and speciality medicines from India could also face tariffs.
Several Indian players already operate manufacturing facilities in the US, which could soften the blow. But for those without, the risk is real. Given their thin profit margins in the US generics market, absorbing tariff costs would be difficult, raising the likelihood that US consumers and insurers will see higher prices.
Global Ripple Effects
Analysts warn that such steep levies could worsen drug shortages in the US and drive up healthcare inflation, given the country’s heavy reliance on low-cost Indian generics. Meanwhile, Indian exporters already grappling with Trump’s 50 per cent tariffs on imports from India, including a 25 per cent penalty for Russian oil trade may face fresh pressure to shift production to US soil or explore new markets.
