The decision could hit India hard, as it is the largest exporter of generic drugs to the US.
US President Donald Trump has announced steep tariffs on imported generic medicines, saying the move is meant to bring pharmaceutical manufacturing back to American soil, news agency PTI reported. The decision could hit India hard, as it is the largest exporter of generic drugs to the US.
What Trump announced:
In a post on Truth Social, Trump said that from 1 August, generic drugs entering the US would keep a zero per cent tariff for two years. After that, the tariff would rise to 100 per cent for a year, and then to 200 per cent from the third year onward.
Trump said the plan was meant to bring generic drug manufacturing back to the US, “with a penalty to those companies that decide not to build plant and equipment” within the time given.
He said the goal of the policy was to protect people in the United States, and that the existing approach to patented, branded and innovative drugs would remain unchanged.
Are Indian exports at risk?
India is often called the “pharmacy of the world” because of how widely it supplies generic medicines globally, PTI reported. In 2025, India exported pharmaceuticals worth $9.7 billion (roughly Rs 93,500 crore) to the US, making up 38 per cent of its total global pharma exports of $25.8 billion, according to a report by the Global Trade Research Initiative cited by PTI. Indian generic drugs are widely used to treat high blood pressure, diabetes, cancer, infectious diseases and mental health conditions.
The announcement triggered an immediate reaction on Dalal Street: India’s Nifty Pharma index fell nearly 2 per cent in early trade on Wednesday, while Reuters put the drop at 1.6 per cent as investors weighed the phased tariff structure. Shares of major exporters including Sun Pharmaceutical Industries, Cipla, Dr Reddy’s Laboratories, Lupin and Aurobindo Pharma fell by up to around 2-2.5 per cent.
The broader market slipped too, with the Nifty 50 down 0.41 per cent and the BSE Sensex down 0.5 per cent, further weighed by rising crude oil prices linked to the widening Middle East conflict, Reuters reported.
However, brokerage Motilal Oswal Financial Services believes the tariff plan is unlikely to seriously hurt Indian drugmakers.Tushar Manudhane, senior vice president and institutional research analyst for healthcare at the brokerage, said many Indian pharma firms operate through US-based subsidiaries, meaning tariffs would apply to the lower transfer price at which products enter the US rather than the final retail price. “The tariff is presumably at pricing at which it enters US market,” he said, according to ANI.
