US President Donald Trump on Thursday announced a 100% tariff on imported branded and patented pharmaceutical drugs, requiring companies to establish US-based manufacturing plants to avoid the duty.
“I’m putting a 100% import tax on pharmaceutical drugs unless the companies are building plants right here in the United States,” Trump said on Truth Social. “Breaking ground, under construction, that’s the deal. No exceptions.”
The move is part of Trump’s broader push to strengthen domestic manufacturing and reduce US dependence on foreign companies.
What the Tariff Means for India
India exports over one-third of the drugs consumed in the US, but the bulk of these exports are generic medicines, which are cheaper alternatives to branded drugs. Since the tariff targets branded imports, experts believe Indian generics are unlikely to face an immediate hit.
“India being an exporter of generic drugs is unlikely to be impacted immediately. But the announcement may have a sentimental impact on pharmaceutical stocks. There is also a risk that future tariff measures could extend to generic drugs, which could have a more significant impact,” the India Today quoted Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, as saying.
According to reports, India exports over 45 per cent of generic and 15 per cent of biosimilar drugs used in the US.
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Companies like Dr Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma and Gland Pharma reportedly earn anywhere from 30-50 per cent of their total revenues from the American market.
Pharma Stocks Face Sharp Sell-Off
The announcement triggered a sharp reaction in Indian stock markets. The Nifty Pharma index dropped nearly 2% on Friday, with all 20 constituent stocks trading in the red.
Major companies like Sun Pharma, Cipla, and Dr. Reddy’s saw notable declines in early trade. Analysts said the sell-off reflected investor fears rather than immediate business risks, given that Indian exports are largely generic medicines.
Experts advise close monitoring of the situation, warning that any future extension of tariffs to generics could directly hit India’s $25-billion pharmaceutical export sector.
