Trump’s drug tariff plan puts India’s pharma sector on alert

US President Donald Trump on Wednesday announced plans to onshore drug manufacturing by keeping tariffs on imported generic medicines at zero per cent for two years before raising them to 100 per cent in August 2028 and 200 per cent thereafter —  a move that could impact India.

India is the largest exporter of generic drugs to the US.

In a post on Truth Social, Trump said beginning August 1, the US will continue to have a zero per cent tariff on all generic drugs brought into the country for two years, after which it will be raised to 100 per cent for one year, and 200 per cent thereafter.

“Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for two years, after which the TARIFF will be raised to 100 per cent for one year, and 200 per cent thereafter,” Trump said.

“This is done to RESHORE Generic Pharmaceutical Production into America, with a penalty to those Companies that decide not to build Plant and Equipment within the stated period of time given to them,” Trump said.

The president said the objective of this policy is to protect the people of the United States.

“The Policy on Patented, Branded, or Innovative Drugs, which has been so successful, will remain as it is,” he said.

India is often referred to as the pharmacy of the world, as it supplies generic medicines to countries worldwide.

In 2025, India exported USD 9.7 billion worth of pharmaceuticals to the US, accounting for 38 per cent of its total global pharma exports of USD 25.8 billion, according to a Global Trade Research Initiative.

Indian generic medicines are widely prescribed for hypertension, diabetes, cancer, infectious diseases, and mental health.

Trump’s announcement came days after US Trade Representative Jamieson Greer, in an interview with the New York Times, said that the US was planning to impose more tariffs to recreate levies struck down by the Supreme Court earlier this year.

The Trump administration plans to impose new tariffs of 10 to 12.5 per cent on as many as 60 countries, including India, citing investigations into alleged forced-labour practices and unfair trade policies.

The US trade chief said the tariff policy was driven purely through an economic perspective instead of a foreign policy approach.

“This is not a foreign policy shop. This is an economics shop here. And so when I look at someone like the European Union that blocks American agricultural goods for specious, nonscientific reasons, that’s a problem. Friend or foe, that’s an issue,” he said in response to a question that the tariff policy was hard on traditional allies. According to the New York Times report, generic drugs, such as statins and antibiotics, account for about 90 per cent of Americans’ prescriptions. They are most often manufactured in India, with heavy reliance on China for ingredients. Republicans and Democrats have identified that as a national security vulnerability.

Doctors and supply chain experts have been sharply critical of the idea of taxing imported generics, saying it threatened to raise costs, spur rationing and lead to shortages of crucial drugs. Until now, the administration had said that generic drugs would be exempted from tariffs, the Time report said.

John Murphy III, chief executive of the Association for Accessible Medicines, a trade group for generic drug makers, said in a statement on Tuesday evening that his industry will work with the administration and lawmakers “to pursue solutions that restore the generics industry to growth and to prioritize its place as a critical national security asset here in the US,” the report said.