Trump slaps 100% tariff on branded drugs; experts see little impact on India

US President Donald Trump announced on Friday a 100 per cent tariff on all imported branded or patented pharmaceuticals starting October 1, unless the exporting companies are actively building manufacturing plants in the US.

In a post on Truth Social, Trump said, “Starting October 1, 2025, we will be imposing a 100 per cent tariff on any branded or patented pharmaceutical product, unless a company ‘IS BUILDING’ its manufacturing unit in America. ‘IS BUILDING’ will be defined as breaking ground and/or under construction. There will, therefore, be no tariff (on such company) if construction has started.”

He also announced a 50 per cent tariff on kitchen cabinets and bathroom vanities, a 30 per cent tariff on upholstered furniture and a 25per cent tariff on all heavy trucks to protect US manufacturers.

Following the announcement, shares of major Indian pharmaceutical companies fell by up to 2.5 per cent. Zydus was the worst affected, down 4.34 per cent, while Sun Pharmaceutical declined 2.5 per cent. Shares of Cipla, Dr Reddy's Laboratories and Apollo Hospital also fell.

However, analysts project a limited direct impact on Indian pharmaceutical exports, as the majority are generic drugs rather than branded or patented products. According to ICICI Direct Research, Indian pharma exports to the US totalled nearly $10 billion last year. It said, “We believe the direct near-term impact of the newly imposed tariffs on Indian pharma companies is limited since the majority of the exported drugs are generic in nature.”

Ajay Srivastava of the Global Trade Research Initiative (GTRI) said the tariff aimed at pressuring global pharma firms to shift manufacturing to the US. He said India’s exports to the US, which reached $9.8 billion in FY2025, were largely composed of low-cost generics, reducing immediate exposure to the new policy.

The GTRI further noted that European countries mainly Ireland, Switzerland and Germany, which exported high-value branded and patented drugs produced by global giants such as Roche, Novartis, Sanofi, Bayer and GSK, were likely to be significantly affected. Srivastava said while branded generics might face uncertainty, there was no clarity on their treatment under the new tariffs.