Trump’s 100% pharma tariff: Here’s how India can cushion the blow

As the Trump administration announces a 100% tariff on any branded or patented pharma products from October 1, 2025, the Indian pharmaceutical sector is bracing for significant changes, though it can navigate these challenges by focusing on market diversification, according to an analysis by GlobalData.

While the immediate impact on India’s core generic drug export business may be limited, as most generics are not directly targeted by these tariffs, significant risks remain, says Ramnivas Mundada, Director of Economic Research and Companies at GlobalData. “If the US expands tariffs to encompass generic medicines in the future, it will directly affect India’s primary export category. Furthermore, Indian generic manufacturers, operating on thin profit margins, could find the US market financially unviable if tariffs expand, potentially leading to reduced supply of affordable medicines.”

Notably, the US has emerged as the leading destination for Indian pharmaceutical exports, accounting for 34.5% of the total in the fiscal year 2024-25. India’s pharmaceutical exports to the US surged by 20.4%, reaching $10.5 billion, while overall exports rose by 9.4% to $30.5 billion during the same period, as reported by the Pharmaceutical Exports Promotion Council of India.

While the US tariff announcement introduces uncertainty for India’s pharmaceutical sector, proactive strategic responses can help mitigate risks and reinforce the industry’s global standing, the analysis suggests.

“However, the impending tariffs have already triggered a negative reaction in the Indian stock markets, with the Nifty Pharma index experiencing a notable decline. Major players in the sector, including Sun Pharma, Dr. Reddy’s Laboratories, and Lupin, have also seen their share prices drop,” says Mundada.