Trump Announces New Generic Drugs Tariff Plan: What It Means for India

This initiative aims to boost domestic pharmaceutical manufacturing. Generic drugmakers, operating on thin margins, face challenges absorbing these costs.

US President Donald Trump on Tuesday announced that imported generic medicines will face a 100% tariff from August 2028 unless manufacturers shift production to the United States, with the duty set to double to 200% a year later.

In a post on Truth Social, Trump said generic drug manufacturers would have two years to relocate production to the US or face the import levy. “This is 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,” he wrote.

The announcement forms part of Trump’s broader push to encourage pharmaceutical companies to manufacture more medicines in the United States. His administration launched a national security investigation into pharmaceutical imports in April 2025 under Section 232 of the Trade Expansion Act.

The President said previously announced plans for tariffs on patented medicines would remain unchanged. Those proposals include duties of up to 100% on certain imported drugs, although several major exceptions are expected.

Also Read: Trump’s Trade War Returns – New Tariffs On Countries Coming ‘Soon’, Will India be Hit?

Unlike manufacturers of patented medicines, generic drugmakers typically operate on narrow profit margins and rely on global production networks, making it more difficult to absorb higher import costs.

According to Bloomberg, several major pharmaceutical companies, including Merck & Co. and Eli Lilly & Co., have already reached agreements with the Trump administration to avoid some of the proposed tariffs on patented medicines.

Generic manufacturers, however, have fewer alternatives.

Richard Saynor, chief executive of Swiss generic drugmaker Sandoz Group AG, had warned last year that higher US tariffs were likely to increase medicine prices and reduce patient access. The company, along with competitors Teva Pharmaceutical Industries Ltd. and Viatris Inc., manufactures many of its generic medicines outside the United States, including in Canada and Austria.

The proposed tariffs could have significant implications for India, the largest supplier of generic medicines to the United States. According to India’s Commerce Ministry, pharmaceutical exports to the US were worth $10.5bn during the 2024-25 financial year, making the sector one of India’s three largest exports to the American market.

Bloomberg reported that tariffs on pharmaceutical products could affect more than 40% of India’s exports to the US, adding to existing duties on steel, aluminium and automobiles.

However, it remains unclear how much of the proposed tariff would apply to Indian generic medicines. A trade agreement reached between Washington and New Delhi in February stated that India would “receive negotiated outcomes with respect to generic pharmaceuticals and ingredients.”

Affordable Medicines at Risk

Previous tariff proposals raised concerns about the supply of low-cost medicines imported from India. According to an earlier Bloomberg News analysis using data from healthcare intelligence firm Symphony Health, commonly prescribed oral contraceptives, medicines for high blood pressure and treatments for depression could be among the products most affected.

The analysis found that around 65% of all birth control pill prescriptions dispensed in the United States in 2024 were manufactured by two Indian companies, Glenmark Pharmaceuticals Ltd. and Lupin Ltd.

Broader Tariff Plans Continue

Broader Tariff Plans Continue

Separately, the White House is working to replace the administration’s emergency tariffs after the US Supreme Court ruled earlier this year that the previous measures were unlawful.

The current across-the-board 10% tariff is due to expire on Friday.

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