Trump’s Drug Tariffs Rattle Indian Pharma and Global Markets

India’s position as the world’s pharmaceutical hub rests on its dominance in generic drug production. According to trade body Pharmexcil, the U.S. accounts for over 35% of India’s pharma exports, valued at $10 billion in FY25. For several leading drug makers, America contributes 40–50% of revenues, underscoring the sector’s heavy dependence.

President Donald Trump’s decision to impose 100% tariffs on branded and patented drug imports from October 1 has triggered ripples across markets. While generics remain exempt for now, the threat of extension looms large, particularly for complex generics and specialty medicines, which form a critical part of India’s export portfolio.

The impact on companies is evident. Dr. Reddy’s, which earns 47% of its revenues from the U.S., and Sun Pharma, with 37% exposure, face heightened risks. Lupin, Zydus Lifesciences, and Aurobindo Pharma, each with billion-dollar U.S. revenues, are also vulnerable. Markets reacted sharply, with shares of major Indian pharma firms dropping up to 5%, some hitting 52-week lows.

Globally, the announcement could reshape access to advanced therapies. Patented medicines such as Denmark’s Wegovy and Ozempic, already costly, may become unaffordable for many Americans. With prescription drugs forming around 10% of household medical expenses, the burden is expected to shift onto patients and insurers.

An Ernst & Young study estimates that even a 25% tariff on patented medicines could raise annual drug costs by $51 billion. Countries outside U.S. exemptions, including the U.K., Switzerland, and Singapore—key pharma hubs—are now staring at steep tariff burdens, potentially disrupting global supply chains.

India’s generics sector, which supplies 90% of U.S. prescriptions, has been spared immediate tariffs but faces uncertainty over biosimilars and APIs. Given India and China’s dominance in API supply, future tariff expansion could disrupt global medicine availability.

For India’s pharma sector, Trump’s move underscores the urgency of diversifying export markets and forging new trade alliances. As geopolitical tensions reshape global healthcare supply chains, over-reliance on the U.S. is no longer sustainable.