US President Donald Trump has announced that the US will soon impose new tariffs on imported medicines. This decision is part of his ongoing push to bring more manufacturing jobs back to the US. The move could have a major impact on India, which exports a large portion of its pharmaceutical products to America.
Speaking at a Republican event, Trump said the new tariff is aimed at encouraging drug companies to shift their production to the US. Until now, medicines and semiconductors were not included in the US’s previous tariff policies.
How Will This Affect India?
The United States is the biggest buyer of Indian medicines. In the financial year 2023-24, India exported $27.9 billion worth of medicines, and about 31% of that—around $8.7 billion—went to the US.
India supplies over 45% of the generic (low-cost) drugs and 15% of biosimilar drugs (similar to original biological medicines) used in America. Companies like Dr Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma, and Gland Pharma earn 30% to 50% of their total income from the US market.
Both Countries Could Be Hurt
Experts believe that if the US adds tariffs to imported medicines, it could cause problems for both India and America.
Analysts from HDFC Securities told newspaper that the US relies heavily on low-cost Indian drugs. If tariffs are added, drug prices may rise, leading to inflation and shortages in the US.
Read more: Indian Stock Market Update: 5 Key Things That Changed Overnight
Indian pharmaceutical companies, which already make small profits in the US market, may not be able to handle the extra cost. They might have to increase prices, which will directly affect American consumers and health insurance companies.
Conclusion
This new US tariff plan could shake up the global pharmaceutical market. It may hurt Indian exporters and raise drug prices for American patients—impacting both sides of the trade.
