Trump’s 100pc tariff on patented drugs puts spotlight on India’s USD 30 billion pharma export market

NEW DELHI: United States President Donald Trump announced on Friday that his administration will impose a 100 per cent tariff on branded and patented pharmaceutical products beginning October 1, 2025, unless the manufacturing companies establish production facilities in the United States.

The Indian pharmaceutical sector supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicines in the UK. India’s annual drug and pharmaceutical exports touched a record USD 30 billion in FY25 bolstered by a 31 per cent year-on-year surge in March.

According to a government release, drug and pharmaceutical exports increased by 6.94 per cent from USD 2.35 billion in August 2024 to USD 2.51 billion in August 2025 alone.

In FY24, India’s pharmaceutical exports stood at USD 27.9 billion, of which 31 per cent, about USD 8.7 billion (Rs. 77,231 crore), were directed to the US, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil). In the first half of 2025 alone, pharmaceutical shipments worth USD 3.7 billion (approximately Rs. 32,505 crore) were sent overseas.

Leading companies such as Dr. Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma and Gland Pharma derive between 30-50 per cent of their overall revenues from the American market.

According to a separate government report, India’s pharmaceutical industry is a global powerhouse, ranking third in the world by volume and 14th in terms of production value. It supplies over 50 per cent of global vaccine demand and nearly 40 per cent of generics to the US. The industry is projected to grow to USD 130 billion by 2030 and USD 450 billion market by 2047.

Backed by policy support for pharmaceuticals, such as the PLI scheme (Rs. 15,000 crore) and the Strengthening of Pharmaceuticals Industry (SPI) scheme (Rs. 500 crore), the industry continues to expand its global footprint. The PLI scheme is driving investments into 55 projects to make high-end drugs such as cancer and diabetes medicines in India, while the SPI scheme, that focuses on raising the quality, competitiveness, and resilience of smaller pharma companies, is funding R&D and modernizing labs, enabling Indian companies to compete globally. Beyond cost efficiency, India has emerged as a hub for affordable, high-quality medicines, reinforcing its rightful title as the “Pharmacy of the World,” the report said.

Earlier, in a post on Truth Social, US President Trump wrote, “Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as ‘breaking ground’ and/or ‘under construction.'”

Clarifying the scope of the measure, Trump added that companies that have already begun construction of plants in the US will be exempt from the new tariff. “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!” the post read.

He also announced sweeping tariffs on various household products, including imported kitchen cabinets and certain types of furniture, potentially adding even more costs to a category that has surged in price in recent months. Trump also announced heavy tariffs on trucks and pharmaceuticals.

Trump wrote in a Truth Social post, “We will be imposing a 50 per cent Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st, 2025. Additionally, we will be charging a 30 per cent Tariff on Upholstered Furniture.” (ANI)