US President Donald Trump on Thursday announced a 100% tariff on imported branded and patented pharmaceutical drugs, requiring companies to have US-based manufacturing plants to avoid the duty.
“I’m putting a 100% import tax on pharmaceutical drugs unless the companies are building plants right here in the United States,” . “Breaking ground, under construction, that’s the deal. No exceptions.”
The announcement is part of Trump’s broader strategy to strengthen domestic manufacturing in the US and reduce reliance on foreign companies.
While the policy directly targets branded drugs, it has triggered concern around the world, especially in India, which is one of the largest exporters of pharmaceuticals globally.
India exports over one-third of the drugs consumed in the US, but most of these are generic medicines — drugs that are no longer under patent and are cheaper than branded versions. Since Trump’s 100% tariff focuses on branded drugs, Indian generic exports are largely unaffected for now.
However, experts caution that the announcement could still affect market sentiment and investor confidence.
“India being an exporter of generic drugs is unlikely to be impacted immediately. But the announcement may have a sentimental impact on pharmaceutical stocks. There is also a risk that future tariff measures could extend to generic drugs, which could have a more significant impact,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, added that even though most Indian exports are generic and discretionary, any tariffs on critical medicines could push up healthcare costs and affect profit margins. She noted, “Until there is more clarity on how these tariffs will be implemented, the medium-term outlook for Indian pharma remains neutral.”
Analysts also that companies and investors should keep a close eye on whether future measures might target generic drugs, which form the bulk of India’s pharmaceutical exports.
The Trump administration has also been moving from country-specific tariffs to product-specific tariffs, signalling that other sectors could be affected. While this 100% tariff currently applies only to branded drugs, it fits into a wider US policy of using tariffs to protect domestic industries and reduce the trade deficit.
Pharmaceutical stocks on Dalal Street reacted sharply to the announcement on Friday. The Nifty Pharma index fell narly 2%, with all 20 constituent stocks in the red.
Major stocks such as slipped sharply in early trade. The broader stock market, already under pressure from foreign institutional investor (FII) selling, extended its losing streak.
Experts say the fall reflects market fears rather than immediate business risk. Dr. Vijayakumar noted that investors could see this as a short-term turbulence rather than a long-term threat, especially since India’s generic medicines dominate US imports.
Analysts advise watching the situation closely for any changes in US trade policy that could directly affect generics.
While the immediate effect on Indian pharma exports may be limited, the announcement has highlighted the vulnerability of global markets to policy shifts.
The coming weeks will be critical for both Indian exporters and investors as they monitor how the US implements this 100% tariff and whether future measures broaden its scope.