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Trump’s 100% Tariff on Patented Drugs Poses Challenge to India’s $30 Billion Pharma Exports

[Photo : ANI]

US President Donald Trump announced on Friday that his administration will impose a 100 per cent tariff on branded and patented pharmaceutical products starting October 1, 2025, unless the manufacturing companies establish production facilities in the United States.

India’s pharmaceutical industry, often called the “Pharmacy of the World”, supplies over 50 per cent of global vaccine demand, 40 per cent of generics to the US, and 25 per cent of medicines in the UK. India’s annual pharma exports reached a record USD 30 billion in FY25, supported by a 31 per cent year-on-year surge in March.

Government data shows that exports grew 6.94 per cent from USD 2.35 billion in August 2024 to USD 2.51 billion in August 2025. In FY24, exports to the US alone accounted for 31 per cent (around USD 8.7 billion or Rs 77,231 crore) of India’s total pharmaceutical shipments. Leading companies such as Dr. Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma, and Gland Pharma derive 30–50 per cent of their revenues from the US market.

India ranks third globally by pharma volume and 14th by production value, with projections suggesting the industry could reach USD 130 billion by 2030 and USD 450 billion by 2047. Policy initiatives like the PLI scheme (Rs. 15,000 crore) and the Strengthening of Pharmaceuticals Industry (SPI) scheme (Rs. 500 crore) are driving domestic production of high-end medicines and strengthening smaller firms’ R&D and manufacturing capabilities.

Trump clarified that companies that have already begun construction of US plants will be exempt from the new tariff. In a post on Truth Social, he stated: “Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America.”

In addition to pharmaceuticals, Trump announced tariffs on household products, including a 50 per cent tariff on kitchen cabinets and bathroom vanities, and a 30 per cent tariff on upholstered furniture.

The move places India’s USD 30 billion pharmaceutical export market in sharp focus, potentially prompting Indian manufacturers to reassess US-centric strategies amid rising trade barriers.

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