Trump’s 100% Drug Tariff Puts India’s Pharma Exports and US Supply at Risk

India’s Pharma Faces Shock as Trump’s 100% Tariff Sparks Stock Fall 2–5% and US Supply Concerns – Trump Pharma Tariff: Big Risk for India

Donald Trump has announced a 100 % tariff on imported branded and patented medicines (pharmaceutical drugs) starting October 1. He demands that drug makers build US production sites; otherwise their imports face full tariff. This bold move puts India’s pharma export sector under sharp threat. The decision has created tension in India, which depends heavily on pharma export to the US

India is often called the “Pharmacy of the World.” It supplies about 20 % of global generics and nearly 60 % of global vaccines. The country exported over $30 billion worth of medicines in 2024–25, and the US alone made up about one-third of this. That shows how deeply linked India’s drug industry is with the US market.

As above mentioned, the Indian industry depends heavily on the US market: in 2024–25, over $30 billion in pharmaceuticals left India’s shores, with around $10.5 billion heading to the United States. The US accounts for nearly 31 % of India’s pharma export value.

Short-term relief but rising worries

At first, the tariff targets only branded and patented drugs. These are sold mostly by multinational companies. India’s generic medicines, which make up the largest share of its pharma export, are not directly included. That gives some short-term relief. Still, the news shook investors. Stocks of major firms such as Sun Pharma, Dr. Reddy’s, and Biocon fell 2–5 % after the announcement.

Experts warn that the bigger worry lies in what happens next. If Trump extends tariffs to complex generics or specialty medicines, India’s pharma industry could face a serious setback. 

Such a step would not only hurt Indian exporters but also affect American patients. Generics from India account for nine out of ten prescriptions in the US and save its healthcare system billions of dollars each year. Any supply cut could lead to shortages and higher prices.

Industry response and future path

Some Indian drugmakers say they may be forced to stop shipping medicines to the US if the tariff rules tighten. This would create a gap that cannot be filled quickly. Analysts note that the US might end up relying more on Chinese drug suppliers, which could even raise security concerns in Washington.

Still, not all is seen as negative. Industry leaders point out that Indian companies are already exploring new markets, raising research investments, and setting up more plants overseas. Some even see this as a chance for India to strengthen its own pharmaceutical base and become less dependent on US policy shifts.

For now, the US remains India’s largest pharma export market. With the October deadline nearing, both sides face a test. India’s industry must prepare for sudden changes, while the US risks higher drug costs and shortages if the flow of affordable Indian medicines slows down.