US President Donald Trump has announced a phased tariff plan on generic drug imports, with 100% tariffs from August 2028 and 200% thereafter, aiming to shift pharmaceutical manufacturing to the US. The move could significantly impact India's pharmaceutical sector, as the US is its largest export market for generic medicines. The announcement also comes amid ongoing India-US trade negotiations, which have yet to reach an agreement.
Phased tariffs have been imposed by the United States' President, Donald Trump, on the importation of generic medicines. This has come as a big blow to the Indian pharmaceutical industry since it is the biggest producer of generic medicines for the American market.
These tariffs have come at a time when negotiations between India and America regarding trade have not been sorted out yet.
Trump Announces Phased Tariff Plan
In a post made on Truth Social, Trump made an announcement indicating that all generic drugs entering the US will keep enjoying 0% tariffs from August 1, 2026, for the next two years. But after that period, the tariff regime will become very stringent.
As indicated in the statement, imports of generic medicines will be subjected to 100% tariffs for one year commencing August 2028, and then they will be doubled to 200%.
The phased policy will give enough time for companies to relocate their manufacturing processes to the US prior to implementing the increased tariffs.
Objective Is to Reshore Pharmaceutical Manufacturing
This move was meant to facilitate bringing the production of generic drugs back into America and motivating companies to build manufacturing plants inside the country.
The reason behind imposing such a huge duty on companies opting not to invest in building factories within the country during the period of transition will be very clear now.
As per Trump, the policy will work towards safeguarding the interests of Americans along with boosting domestic drug production. Trump also added that the ongoing policy for branded drugs will not see any changes as it had been successful.
Moreover, Trump further informed that manufacturing plants for pharmaceuticals are coming up in the US like never before.
Earlier Tariffs on Branded Pharmaceuticals
This latest policy follows the executive order issued by President Trump on April 2, in which tariffs were levied against branded drugs.
In accordance with this executive order, any import of branded drugs became liable for a 100% levy if the manufacturers did not enter into government-supported pricing contracts or moved their manufacturing units to the US.
This latest plan of imposing tariffs focuses only on generic medicines.
Potential Impact on India's Pharmaceutical Industry
This news story can have huge implications on India, which is also known as “pharmacy of the world” because of the country’s massive scale of generic medicines production and exports.
As per an article published by PTI citing a Global Trade Research Initiative report, India exported medicines valued at $9.7 billion to the US in 2025, contributing 38 percent to the total value of the country’s global medicine exports which stood at $25.8 billion.
Indian pharmaceutical companies manufacture a diverse variety of medicines and sell them to the US which include those meant to treat cardiovascular disease, diabetes, cancers, infectious diseases, mental disorders and many other ailments. Since the US is still India’s largest medicine export destination, the tariff regime can pose new problems for exporters.
India-US Trade Talks Yet to Reach Agreement
The tariff news is released amid continuing talks between India and the US on trade.
As per a report, India has decided not to rush through an interim trade deal amid failed talks to overcome differences, saying it will sign only that deal which safeguards its interest in the long run.
Despite months of talks, both nations could not finalize a limited trade deal during the visit of US Trade Representative Jamieson Greer to New Delhi last month.
It was earlier reported by Reuters on July 13 that both sides were confident of an interim trade deal but later, the talks got stuck due to demands of India.
