Trump announces 100% tariff on pharma drugs, Indian imports likely to be spared

POccupier Donald ruff proclaimed on th a 100% tariff on imported branded or patented pharmaceuticals, efficacious October 1, raising concerns that much of the cost will be passed onto consumers in the form of higher prices. The move aims to re-shore pharma manufacturing and eliminate some of the dependencies.The fast-growing Indian exports to the US may be spared from the new tariff, as most of them are generic pharma drugs. India is the third-largest producer of pharma drugs by volume and accounts for 20% of the global export. Trump has imposed 50% tariffs on Indian goods, including a punitive levy on Russian oil purchases, straining bilateral relations. The US also revoked a sanctions waiver allowing India to establish a presence at the Iranian port of Chabahar.“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction.’ There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started,” Trump said in a Truth Social post.India’s pharma exports were worth $30 billion in the 2025 financial year. The US is their largest market, accounting for 34.5% of all exports, according to the Pharmaceuticals Export Promotion Council of India (PHARMEXCIL).Much of India’s exports in the sector, including drug formulations, biologicals, and bulk drugs, are generic drugs. The sector, expected to grow to $130 billion by 2034, according to a PHARMEXCIL estimate, has relied strongly on exports, which have grown at a fast compounded annual growth rate of 10%.The tariff on pharmaceuticals comes after months of threats and demands for pharma companies to manufacture in the US. The Trump administration launched a Section 232 investigation into imports of pharma products to determine if they posed a national security threat. Such an investigation allows the president to impose tariffs or restrict imports in case of a national security threat.In July, Trump threatened a 200% tariff on pharma imports if companies did not bring manufacturing to the US.In May, Center for a Prosperous America, which represents domestic producers and workers across sectors, flagged the dependence on imports, saying the bulk of them came from China and India. “Together, they supply the majority of US generics and essential medicines. Accounting for both finished drugs and essential base Active Pharmaceutical Ingredients (APIs), China and India supply the US with about 70-80% of the US’s total generic drug supply.”In 2023, the shutdown of a plant in India for violating safety standards led to a shortage of cancer drugs in the US.Sergio Gor, who has been nominated as the next US ambassador to India, has said that Washington aims to encourage Indian investments in the American pharma supply chain.Pharma cooperation featured in secretary of state Marco Rubio’s meeting with external affairs minister S Jaishankar this week on the sidelines of the UN General Assembly.