R. Suryamurthy
U.S. President Donald Trump has announced tariffs of up to 100% on imports of branded and patented pharmaceutical drugs beginning October 1, a move that could reshape global drug supply chains and unsettle India’s $10-billion export trade with America.
“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 said in a late-night post on Truth Social. He defined “building” as plants that have “broken ground or are under construction.”
The measures extend Trump’s aggressive use of tariffs beyond earlier import duties imposed in August on a range of goods, from metals to consumer products. Citing “national security and other reasons,” Trump also unveiled levies of 50% on kitchen cabinets and bathroom vanities, 30% on upholstered furniture, and 25% on heavy trucks.
India’s Export Stakes
The U.S. is India’s single-largest pharmaceutical market, absorbing nearly 40% of India’s $27.9 billion pharma exports in FY24. According to government data, shipments to America were worth $9.8 billion in FY25, dominated by low-cost generics and off-patent formulations.
Industry sources note that Indian drugmakers – including Dr. Reddy’s, Sun Pharma, Aurobindo, Lupin, Cipla and Zydus – earn between 30% and 50% of their revenues from the U.S. market. India also supplies nearly half of America’s generic drugs by volume.
At first glance, the new U.S. tariff appears targeted at multinational giants that dominate the branded and patented segment, where Europe leads exports. However, the policy’s language has created uncertainty over “branded generics” – off-patent drugs sold under brand names such as Crocin or Augmentin. If Washington classifies these under “branded” imports, Indian firms could face exposure.
Analysts See Europe Hit Harder
Neil Shearing, chief economist at Capital Economics, said exemptions for generics and for companies building plants in the U.S. would blunt the policy’s impact. “Pharmaceuticals is one area where we think there may have been significant inventory accumulation this year, as importers sought to front-run potential tariffs,” he noted.
The steepest blow, economists argue, will fall on Europe. Ireland, Switzerland and Germany – which together accounted for over 40% of U.S. pharma imports last year – rely heavily on branded and patented drugs. Global majors such as Roche, Novartis, GSK and Bayer have already pledged investments of more than $350 billion in U.S. facilities to offset the tariffs.
India’s Cushion in Generics
For Indian firms, the generics-heavy portfolio could provide short-term protection. “The U.S. decision to impose 100% tariffs on branded and patent-protected medicines is a significant shift in trade policy,” said Manoj Mishra, partner at Grant Thornton Bharat. “While companies manufacturing branded products abroad may face headwinds, domestic generic producers could even see near-term gains as higher branded prices push demand toward cost-effective alternatives.”
Still, industry executives caution that margins in U.S. generics are thin and any extension of tariffs to complex generics or branded generics would squeeze exporters. Indian policymakers are seeking clarity from Washington before assessing the scale of disruption.
For now, Trump’s tariff shock looks set to redraw the global pharmaceutical map, pressuring multinational drugmakers to accelerate U.S. investments while leaving India’s generic-led trade relatively shielded. But as one trade analyst put it, “The devil will lie in the definitions – and whether Washington’s intent is only to squeeze Big Pharma or to pull India’s exporters into the dragnet.”