In another blow to Indian exporters, US President Donald Trump has announced a new set of tariffs, including a 100% duty on branded and patented pharmaceutical imports, 50% on kitchen cabinets and bathroom vanities, 30% on upholstered furniture, and 25% on heavy trucks. The Trump administration announced Friday morning that these tariffs will go into effect on October 1, 2025.
Key Highlights
- Trump’s 100% tariff on branded drugs may slash Indian pharma export revenues overnight.
- Unless companies start U.S. manufacturing immediately, they’ll face full duties under new pharma tariff rule.
As usual, the tariffs were announced in a post on his social media platform Truth Social.
"We will impose a 100% tariff on any branded or patented pharmaceutical product beginning October 1, 2025, unless a company is building a pharmaceutical manufacturing plant in America. "IS BUILDING" will be defined as "breaking ground" or "under construction." "There will be no tariffs on these pharmaceutical products if construction begins," Trump wrote.
Trump claims that this move will encourage companies to establish manufacturing plants in the United States, as companies with facilities already under construction will be exempt from the new tariffs. He has argued that tariffs will increase domestic investment and reduce the deficit.
These announcements came after the release of US economic and employment data on Thursday, which showed that the US economy grew by 3.8% from April to June.
This decision could deal a serious blow to India's pharmaceutical sector, which had hoped to remain largely unaffected by the US administration's previously implemented country-wide tariffs.
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The United States is a critical market for India's pharmaceutical industry, as it is the country's largest export market. India provides more than 45% of generics and 15% of biosimilars used in the US market.
As a result, shares of major companies such as Dr Reddy's, Aurobindo, Zydus, Sun Pharma, and Gland Pharma are expected to be affected on the exchanges today.
While the tariffs appear to target multinational firms' branded and patented drugs, it is unclear whether Indian complex generics and specialty medicines will also be affected.
