In Brief
100% Tariff Imposed on Pharma Sector
Announcement of 100% Tariff on Medicines from October 1
Indian Pharmaceutical Companies Likely to Face Significant Impact
(Donald Trump) President of the United States, Donald Trump, has once again taken a tough economic step. He announced on Thursday that from October 1, 2025, a 100 percent import duty will be imposed on all branded and patented drug products coming to the United States. This announcement has shocked pharmaceutical companies.
Trump clarified on social media that, “As long as a pharmaceutical company does not manufacture their product in the United States, we will impose a 100 percent tariff on any imported branded or patented drug. However, if a pharmaceutical company is manufacturing in the United States, they will not be taxed.
Along with this, he further stated that a 50% charge has been announced on kitchen cabinets, 30% on upholstered furniture, and 25% on heavy trucks. He noted that these steps have been taken “for national security and other necessary reasons.” India is the largest supplier of medicines to the United States. According to the data from the Pharma Export Promotion Council, out of the $27.9 billion worth of medicines exported by India in the fiscal year 2023-24, nearly $8.7 billion were exported to the United States. In the first half of 2025 alone, $3.7 billion worth of exports have been made.
Currently, about 45 percent of the generic drugs and 15 percent of the biosimilar drugs used in America come from India. Companies like Dr. Reddy's, Sun Pharma, Zydus, Aurobindo Pharma, and Gland Pharma earn 30 to 50 percent of their revenue from the American market. Therefore, America's new policy could directly impact these companies.
Notably, American consumers heavily rely on affordable generic drugs from India. There are concerns that if fees increase, drug prices may rise, inflation could be spurred, and shortages of some drugs might occur. Previously, Trump had imposed a 50 percent tariff on Indian imports. Additionally, he has imposed a 25 percent extra penalty for continuing to purchase Russian oil.