New Delhi: US President Donald Trump has announced a major policy change on the import of generic medicines, stating that the United States will impose steep tariffs on imported generic drugs in phases. According to Trump, the move is aimed at bringing pharmaceutical manufacturing back to the US and boosting the domestic pharma industry. The decision is expected to significantly impact India, the largest supplier of generic medicines to the American market.
What is Trump’s new tariff plan?
Donald Trump said on his social media platform ‘Truth Social’ that from August 1, 2026, no tariff will be imposed on all generic drugs imported into the US for the first two years. After this, a 100% tariff will be applicable on these medicines from the third year, i.e., 2028. Later, it will be increased to 200%. He said that companies are being given enough time to set up production units in America. Additional action can also be taken against companies that do not do so within the stipulated time.
Why is America taking this step?
Trump says that the purpose of this policy is to promote the production of generic drugs in America and reduce dependence on imports. According to him, this will strengthen the American pharmaceutical industry, create new employment opportunities, and make the country’s pharmaceutical supply chain more secure. He also clarified that at present there will be no change in the existing policy related to patented and innovative medicines.
How much impact can it have on India?
India is called the ‘Pharmacy’ of the world, and the US market is the largest export destination for Indian pharmaceutical companies. In the financial year 2024-25, India exported medicines worth about $9.7 billion to the US, which was about 38 percent of the country’s total pharma exports. The share of Indian companies in the quantity of generic medicines sold in the American market is considered to be about 40 percent. In such a situation, if the proposed tariff is implemented, both the cost and competitiveness of Indian pharmaceutical companies may be affected.
Which medicines can have the greatest impact?
Indian companies supply many essential generic medicines to America, such as high blood pressure, diabetes, cancer, mental health, infection, and contraceptives. According to reports, a large number of prescriptions written for contraceptive pills in the US during 2024 were for drugs manufactured by Indian companies Glenmark Pharmaceuticals and Lupin. In such a situation, increasing tariffs may increase pressure on the entire Indian pharma industry, including these companies.
Will the effect be visible immediately?
Experts believe that this announcement will not have an immediate impact, as the proposed tariff will be implemented in a phased manner. The pharmaceutical sector is also included in the trade talks already going on between India and America. In such a situation, there remains scope for negotiations between the two countries before the final policy is implemented. However, Trump’s announcement has definitely increased the concerns of the Indian pharmaceutical industry and investors.
What will happen next?
Now eyes are on how the US administration implements this policy and what consensus is reached regarding the pharma sector in the India-US trade talks. If the proposed 100 to 200 percent tariff is implemented, Indian companies may need to increase production in the US, adopt new strategies, or focus more on other global markets.
