Indian Pharma Largely Protected from Trump's 100% Tariffs on Imported Drugs

President Trump's recent announcement of 100% tariffs on imported branded and patented pharmaceuticals has created ripples across the global pharma industry, yet the impact on Indian pharmaceutical companies might be considerably limited.

The Trump administration plans to implement these substantial import duties starting October 1, targeting companies without manufacturing facilities in the United States. This policy aims to incentivize pharmaceutical manufacturing within American borders.

Indian pharmaceutical exports to the US represent approximately one-third of the country's total pharma exports, reaching about $10.5 billion in fiscal 2025 with a 20% year-over-year growth. The majority of these exports consist of generic medications rather than patented drugs.

While major Indian pharmaceutical companies like Dr Reddy's, Sun Pharma, and Cipla do export some patented medicines to American markets, most have already established manufacturing operations within the US, effectively insulating them from the new tariff structure.

The tariffs primarily target multinational corporations such as Pfizer Inc. and Novo Nordisk Inc., which dominate the branded and patented drug segment. Indian players including Cipla Ltd., Dr Reddy's Laboratories Ltd., and Lupin Ltd. have strategically positioned themselves with US-based manufacturing facilities, according to NDTV Profit reports.

Biocon, headquartered in Bengaluru, recently commissioned its American manufacturing facility in Cranbury, New Jersey through its subsidiary Biocon Generics Inc. This timely expansion should shield the company from tariff impacts.

Among major Indian exporters, Sun Pharma may experience some effects until it announces its US capital expenditure plans. The company has not yet released an official statement regarding the tariffs.

Industry analysts at ICICI Securities have expressed uncertainty about whether complex generics and biosimilars might eventually fall under the tariff restrictions in future policy expansions.

Namit Joshi, Chairman of the Pharmaceuticals Export Promotion Council of India, offered reassurance stating, "We don't export any patented and branded drugs to the US. Right now, it is not for generics. We don't foresee much of an impact of this notification on the Indian generic pharmaceutical industry."

Following Trump's announcement, Indian stock markets experienced a notable sell-off, particularly affecting pharmaceutical shares. The Nifty 50 and BSE Sensex both declined by 0.47%, marking their sixth consecutive session of losses.

The pharmaceutical index emerged as the day's biggest loser, dropping 2.4% amid uncertainty regarding the tariff's potential industry impact. Sun Pharmaceutical Industries declined 2%, making it the largest loser on the Nifty 50, while Natco Pharma fell 3.4%, registering the steepest decline within the pharmaceutical index.