Washington, DC: US President Donald Trump has, once again, ignited fear and uncertainty amongst exporters after he announced up to 200% tariffs on generic drugs in a post on his Truth Social platform. According to the post, President Trump has outlined an initial two year zero tariff window starting on August 1, 2026 that will be followed by a 100% duty after three years and a 200% duty by August 1, 2029. This measure is aimed at compelling global pharmaceutical manufacturers to relocate production directly on American soil.
Following the news, the overall Nifty Pharma index dropped 2% while leading companies dependent on the US- Aurobindo, Cipla, Sun Pharma and Dr Reddy’s declined between 1-3% each.
With almost 40% of the US’s generic drugs being supplied from India, the markets have had a reason to be concerned. In 2024-25, India exported almost $9.7 billion of pharmaceuticals to the US, almost 38% of the total global pharma exports, earning it the nickname ‘pharmacy of the world’ especially for low cost, lifesaving drugs.
According to the post, the existing policies on patented, branded and innovative pharmaceutical drugs remain unchanged, with the objective being to protect and promote jobs for the people of America.
Though the steep final rate of 200% could mean significant long term margin risks, the two-year zero-tariff grace offers Indian drugmakers critical breathing room. Besides, many Indian generic manufacturers already operate manufacturing plants in the US. In September last year, Donald Trump had announced a similar move for a 100% tariff on branded pharmaceuticals imported into the US, giving the pharma industry the jitters, though short lived.
