India, the top supplier of generic drugs to the US, could face major setbacks as Trump targets pharmaceutical imports with new tariffs.
April 9, 2025: In a move that could have major consequences for India’s pharmaceutical industry, US President Donald Trump announced plans to impose new tariffs on pharmaceutical imports, aiming to push drug manufacturing back to American soil.
Speaking at a National Republican Congressional Committee event, Trump said the tariffs—expected to be “major”—would soon apply to the pharmaceutical sector, a category previously exempt under his reciprocal tariff strategy.
Why This Matters to India
India is the largest supplier of generic medicines to the United States. According to the Pharmaceuticals Export Promotion Council of India, of the $27.9 billion worth of Indian pharma exports in FY24, nearly $8.7 billion (31%) were shipped to the US.
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India currently supplies:
- Over 45% of the US’s generic drugs
- 15% of its biosimilar drug requirements
Major Indian companies like Dr Reddy’s, Aurobindo Pharma, Sun Pharma, Zydus Lifesciences, and Gland Pharma generate 30–50% of their revenue from the American market.
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Experts Warn of Dual Impact
Analysts warn that this move could backfire for both New Delhi and Washington.
“In case the US starts imposing tariffs on the pharma sector, it will impact both countries,” said HDFC Securities, as quoted by Mint.
The US heavily relies on low-cost Indian generics to maintain affordability in healthcare. Tariffs would force Indian firms—already operating on tight margins—to raise prices. In turn, this could cause inflation, drug shortages, and higher costs for US consumers and insurers.
What’s Next?
If enacted, this policy may:
- Undermine the competitiveness of Indian drugmakers in the US
- Disrupt global supply chains
- Add to US healthcare costs during an election year
India’s pharma sector, already grappling with USFDA compliance challenges, could now face an unpredictable tariff regime in its most critical export market. As both nations walk a tightrope on trade, all eyes are on whether backchannel negotiations can prevent another economic showdown.
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Trump tariffs, India pharma exports, US pharmaceutical tariffs, generic drugs, Dr Reddy’s, Aurobindo Pharma, Sun Pharma, India-US trade, biosimilars, drug prices, pharmaceutical policy, US-India relations, HDFC Securities