Another setback to India? Trump says US may impose tariffs upto 200% on generic drug imports. Here's why
US President Donald Trump announced on Wednesday steep tariffs on imported generic medicines from August 2028. The move could affect India, which is the largest exporter of generic drugs to the US.
US President Donald Trump announced on Wednesday steep tariffs on imported generic medicines from August 2028, asserting that the move was aimed at onshoring the manufacturing of such pharmaceutical products.
Trump said, "Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for a two year period of time, after which the TARIFF will be raised to 100% for a one year period of time, and 200% thereafter."
Why did Trump take this action?
Trump said in his TRUTH Social post that this is being done “in order to RESHORE Generic Pharmaceutical Production into America, with a penalty to those Companies that decide not to build Plant and Equipment within the stated period of time given to them.”
Quick answers to key questions
Trump announced a phased tariff plan starting with a 0% tariff for two years from August 1, 2026, followed by 100% for one year, and eventually 200% thereafter.
Trump stated the tariffs aim to encourage domestic production of generic drugs in the US, penalizing companies that do not build manufacturing facilities in the country.
The tariffs may significantly affect Indian companies, as they are major suppliers of generic drugs to the US, with many deriving substantial portions of their revenue from this market.
While the proposed tariffs pressure companies to onshore production, factors such as high manufacturing costs and competition make it economically challenging for many to do so.
The imposition of tariffs is expected to drive up costs for generic drugs in the US, potentially increasing prices for consumers and affecting overall market dynamics.
"The objective of this Policy is to protect the people of the United States. The Policy on Patented, Branded, or Innovative Drugs, which has been so successful, will remain as is. Pharmaceutical Facilities are being built, at a level never seen before, all over the United States of America," Trump wrote.
On April 2, Trump signed an executive order imposing sweeping new tariffs on imported branded pharmaceuticals. Under the order, a 100% tariff was applied to branded pharmaceutical imports unless manufacturers agree to government-backed pricing arrangements or shift production to the United States.
Impact on India?
The move could affect India, which is the largest exporter of generic drugs to the US.
India is often called the "pharmacy of the world" as it supplies generic medicines to countries across the globe.
In 2025, India exported USD 9.7 billion worth of pharmaceuticals to the US, accounting for 38 per cent of its total global pharma exports of USD 25.8 billion, a Global Trade Research Initiative report said, as per news agency PTI.
Indian generic medicines are widely prescribed for hypertension, diabetes, cancer, infectious diseases, and mental health.
India-US deal
India reportedly refused to fast-track an interim trade agreement with the United States after recent negotiations failed to resolve key differences, insisting it will only sign a deal that serves its long-term interests, according to a Reuters analysis.
Despite months of discussions, India and the US were unable to finalise a limited trade agreement during US Trade Representative Jamieson Greer's visit to New Delhi last month.
Reuters reported on July 13 that both sides had expected an interim pact to be within reach, but negotiations stalled over India's core demands.
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