Washington, Apr 09: Former US President Donald Trump has announced that his administration is preparing to impose a major tariff on pharmaceutical imports — a move that could spell fresh trouble for India, one of the largest exporters of generic medicines to the United States.
Speaking at the National Republican Congressional Committee, Trump said the tariff is intended to encourage drug manufacturers to relocate operations back to the US. So far, pharmaceuticals and semiconductors had remained exempt from the US’s broader tariff strategy.
India’s Pharma Sector at Risk
India’s pharmaceutical exports stood at $27.9 billion in FY24, with nearly $8.7 billion—over 31%—headed to the US, according to the Pharmaceuticals Export Promotion Council. The country supplies more than 45% of America’s generic drugs and around 15% of its biosimilars.
Major Indian firms like Sun Pharma, Dr Reddy’s, Zydus Lifesciences, Aurobindo Pharma, and Gland Pharma derive 30–50% of their revenues from the US market. A tariff could severely hit their margins and force price adjustments.
Mutual Consequences
Experts say the proposed tariff could hurt both nations. “If the US imposes tariffs on pharmaceutical imports, it will affect India’s exports and increase healthcare costs in the US,” HDFC Securities analysts told Mint.
They warned that the US relies heavily on India’s low-cost generics. A tariff could trigger drug shortages, price inflation, and disrupt health services. Indian pharma companies, already operating on slim margins, may be unable to absorb the cost and will likely pass it on to insurers or American consumers.