Donald Trump
Credit: X@realDonaldTrump
New Delhi: US President Donald Trump has announced a new round of tariffs, including a 100% duty on import of branded or patented drugs in America, a move that sank the share prices of leading Indian pharmaceutical companies on Friday.
“Starting October 1st, 2025, we will be imposing a 100% tariff on any branded or patented pharmaceutical product, unless a Company ‘is building’ their pharmaceutical manufacturing plant in America,” Trump wrote on his social media platform Truth Social.
Trump clarified that “is building” will be defined as ‘breaking ground’ and/or ‘under construction.’ “There will, therefore, be no tariff on these pharmaceutical products if construction has started,” he added.
The US President has also announced imposition of a 50% tariff on all kitchen cabinets, bathroom vanities and associated products, a 30% tariff on upholstered furniture, and a 25% tariff on all heavy trucks, citing national security issues.
While the US new tariffs are not India specific, unlike the 50% duty imposed last month, it has caused jitters among Indian drug manufacturers and investors, leading to a 10% slump in their share prices.
Reacting to the fresh rounds of the US tariffs, the Indian government said it is monitoring the matter. “We have seen the report on pharma and other products, and the relevant ministry and department are closely monitoring the matter and examining its impact,” the Minister of External Affairs spokesperson Randhir Jaiswal said at a media briefing.
Though India exports primarily generic drugs to the US, which have been kept out of the new tariffs, the announcement stirred a sharp fall in pharma stocks.
Shares of Sun Pharma, Dr Reddy’s Laboratories, Cipla, Lupin, and Aurobindo Pharma, which are among the major exporters of drugs to the US, fell sharply. Wockhardt Ltd slumped 9.4%. Zydus Lifesciences tanked 4.21% and Glenmark Pharma slipped 2.99% on the BSE.
“Most Indian exports are generics, which remain exempt. Still, the uncertainty around future policy shifts keeps nerves on edge,” said Ajit Mishra, senior vice president for research at Religare Broking.
“For India’s pharma giants, this is a wake-up call to strengthen supply chains and explore US-based manufacturing, even as the sector’s core strength in affordable generics continues to support global healthcare,” he added.
The US is India’s largest pharmaceutical export market, accounting for around 35% of total exports. India primarily exports low-cost generic drugs to the US. Around 80% of India’s total pharma exports to the US in 2024-25 were generic drugs. Drugs, which are not branded or patented, are referred to as generic.
The imposition of 100% tariff means the prices of imported branded and patented pharmaceutical products will double for American importers and consumers.
The announcement comes just a couple of days after an Indian delegation led by Commerce and Industry Minister Piyush Goyal visited the US for talks on the proposed bilateral trade agreement.
“The delegation had constructive meetings with the US government on various aspects of the deal. Both sides exchanged views on possible contours of the deal and it was decided to continue the engagements with a view to achieve early conclusion of a mutually beneficial trade agreement,” the Ministry of Commerce and Industry said in a statement.