India’s pharmaceutical industry is facing a fresh challenge after the United States imposed 100% tariffs on branded and patented drug imports, effective October 1, 2025. This move comes from President Donald Trump’s push to encourage drug makers to set up local production facilities in America, and has raised concerns across Indian business circles.
What Are These Tariffs?
The newly announced tariffs will double prices for American buyers of Indian branded drugs. However, companies with manufacturing plants under construction in the US will not have to pay these tariffs. The rule mainly targets original, patent-protected medicines but leaves generic drugs untouched for now, making the impact more focused on select companies.
Pharma Stocks React Sharply
Just hours after the news broke, Indian pharmaceutical stocks fell between 2% and 7%. Sun Pharma, Cipla, Gland Pharma, Biocon, and Dr. Reddy’s all saw a sharp dip on the bourses. The Nifty Pharma index dropped over 2% in early Friday trading, reflecting market worries about future earnings.
Impact On Indian Business
The United States is India’s number one pharma export market, buying about $10 billion worth of medicines annually and accounting for nearly 35% of India’s total exports. While most Indian companies earn their US revenue by selling generic drugs, experts warn that things could get difficult if future tariffs include complex generics or specialty medicines. For now, generic drug makers like Lupin and Aurobindo will not be hit directly.
Indian Government’s Response
India’s foreign ministry has stated that relevant departments are closely monitoring the situation and examining its impact. The government has begun consultations to decide next steps amid fears of extended tariff coverage.
Outlook For The Sector
Industry leaders are urging the government to ramp up manufacturing incentives through schemes like Production Linked Incentives (PLI) and push for more diplomatic dialogue with the US. Analysts expect the sector’s strong domestic demand and export diversification to absorb most of the shock, unless the tariffs expand further.
