US President Donald Trump on Tuesday announced that his government is gearing up to levy a “major” tariff on pharmaceutical imports. The move, which marks a dramatic policy shift, could have severe consequences for India’s drug industry—a sector that is hugely dependent on US trade.
Addressing the National Republican Congressional Committee fundraiser, Trump highlighted that the new tariff would encourage drug firms to shift manufacturing operations to the US. Pharmaceuticals and semiconductors had so far escaped Trump’s aggressive retaliatory tariff policies.
India’s Pharmaceutical Exports Under Threat
India has a lot to lose if Trump’s suggested tariff is implemented. During FY24, India shipped medicines worth $27.9 billion, of which $8.7 billion—or 31%—went to the US, as per the Pharmaceutical Export Promotion Council of India. The US market is still India’s largest export market for medicines.
Trump: “We’re gonna tariff our pharmaceuticals … we’re going to be announcing very shortly a major tariff on pharmaceuticals.” pic.twitter.com/AzewiYDoHC
— Aaron Rupar (@atrupar) April 9, 2025
It has been reported that India provides more than 45% of generic medicines and about 15% of biosimilars in the US. Dr Reddy’s, Sun Pharma, Zydus Lifesciences, Aurobindo Pharma, and Gland Pharma are key Indian companies whose revenues are 30–50% comprised of US sales.
Experts Warn of Mutual Damage
The tariff is expected to backfire, resulting in economic losses in both nations, according to industry experts. According to analysts at HDFC Securities, the policy would increase costs and disturb supplies in the US.
“Should the US begin imposing tariffs on the pharma industry, both countries would be affected,” they stated. “America relies on low-priced generics made in India, and increased tariffs would mean higher prices, inflation, and a shortage of medicines in the nation.
With Indian pharma companies working on already thin margins, adding more costs will be unsustainable. Most firms will have to transmit those costs to US consumers and insurance companies, potentially driving up healthcare costs in general.
With the world waiting for Trump’s next economic step, India’s pharma industry is preparing for a shock that will redefine the global supply chain.
