The Ministry of External Affairs (MEA) confirmed on Friday that it is closely monitoring the implications of a major trade move announced by US President Donald Trump, which will impose tariffs of up to 100 percent on branded and patented pharmaceutical imports into the United States starting October 1, 2025.

The MEA emphasised that relevant departments, including the Ministry of Commerce and Industry and the Ministry of Chemicals and Fertilisers, are engaged in assessing the possible effects of the measure on India’s pharmaceutical industry and bilateral trade relations.

President Trump’s announcement, delivered via Truth Social, outlined that all branded and patented pharmaceuticals entering the US will attract a 100 percent tariff unless the manufacturing company is building a plant within the United States.

The policy defines "IS BUILDING" as either "breaking ground" or "under construction," providing exemptions to companies already investing in domestic facilities. This decision forms part of a broader protectionist agenda, in which Trump has also signalled tariffs on imported household items, furniture, trucks, and certain categories of finished goods.

At present, the United States is the largest market for Indian pharmaceutical exports, accounting for about 35 percent of the total, or roughly USD 10 billion as of FY25. However, the structure of India’s exports matters greatly: the vast majority of Indian pharmaceutical shipments to the US consist of generic medicines and active pharmaceutical ingredients (APIs), not branded or patented drugs.

Experts point out that since the tariff move targets only patented products, Indian exports are unlikely to face a direct blow, with multinational pharmaceutical companies based in Europe and other regions bearing the greater brunt.

Industry stakeholders have sought to calm concerns that the new tariffs might derail India’s booming drug export sector. Sudarshan Jain, General Secretary of the Indian Pharmaceutical Alliance (IPA), clarified that “India supplies the US mostly with generic products. This [100 percent tariff] applies only to patented branded products manufactured outside the US.” He added that India’s focus on low-cost generics will ensure continued access to the US market.

India’s pharmaceutical industry has expanded significantly in recent years, with record-breaking export numbers. The sector brought in USD 30 billion in FY25, supported by a sharp 31 percent year-on-year surge in March that boosted overall performance.

Additionally, exports in August 2025 reached USD 2.51 billion, reflecting nearly a 7 percent increase compared to August of the previous year. India also continues to play a critical role in the global healthcare system, supplying over 50 percent of the world’s vaccines, 40 percent of generic medicines consumed in the United States, and 25 percent of total pharmaceutical products demanded by the United Kingdom.

While the immediate economic risk to Indian firms appears limited, the development is being monitored given the interconnected nature of global supply chains. Indian manufacturers often supply APIs used by multinational pharmaceutical companies that could fall within the scope of the new tariffs. 

Additionally, India’s role as a strategic partner to the US in both trade and security spheres means New Delhi is carefully assessing the broader implications of these unilateral tariff measures.

With the October 1 deadline approaching, Indian authorities are expected to maintain contact with US counterparts and clarify exemptions while ensuring that Indian exports remain unaffected. Analysts note that the announcement underscores a growing US emphasis on domestic industrial policy and supply-chain security, with potential spill over effects for sectors in which India has both competitive strengths and high exposure to the US market.

Based On ANI Report