US President Donald Trump. File | Photograph credit score: Reuters
US President Donald Trump has given generic drug firms two years to arrange manufacturing amenities within the US and warned that merchandise imported after August 2028 may very well be topic to tariffs of as much as 200%.
The announcement, made by way of a social media submit on Wednesday (22 July 2026), has important implications for India, which sends greater than a 3rd of its pharmaceutical exports to the US. Indian drugmakers sought to be cautious, warning that increased tariffs would finally enhance drug prices for U.S. shoppers.
Trump mentioned the measure is aimed toward boosting the manufacturing of generic medication in the US and lowering dependence on international provide chains.
“Beginning August 1, 2026, tariffs on all generic medication coming into the US will proceed to be 0% for 2 years, then enhance to 100% for one 12 months, after which enhance to 200% thereafter,” he mentioned. He added that the coverage is aimed toward relocating drug manufacturing whereas preserving current preparations for patented and modern medicines.
The announcement spooked pharmaceutical shares. The Nifty Pharma index fell 1.31%, with 18 of its 20 constituents closing decrease. Trade executives largely took a wait-and-see perspective, however reiterated that further prices would probably be handed on to shoppers.
“It isn’t reasonable to maneuver a enterprise like this to the U.S. in a single day,” mentioned Erez Israel, CEO of Dr. Reddy’s Laboratories. “If tariffs have been imposed, we must elevate costs.” He added that the corporate isn’t planning any instant modifications, noting that coverage positions may change over time.
In keeping with the International Commerce Analysis Initiative (GTRI), India is without doubt one of the nations almost definitely to be affected by this proposed measure. India exported medicines value $25.8 billion in 2025, of which $9.7 billion (37.7%) went to the US, its largest abroad market.
Indian firms account for practically 47% of all generic medication allotted in the US, making India the most important supply of inexpensive generic medication. Regardless of this benefit, India’s share of US generic drug imports is estimated at round 30% resulting from low generic drug pricing.
America imported $213 billion value of pharmaceutical merchandise in 2025, together with $94.1 billion value of completed medication bought in retail packs. GTRI founder Ajay Srivastava mentioned many Indian generic medication are considerably cheaper than branded alternate options, permitting them to stay aggressive regardless of the tariffs. Nonetheless, large-scale relocation of generic drug manufacturing to the US might be tough, given the trade’s dependence on world provide chains and imported drug substances.
Priyanka Chigurupati, govt director of Granules India, mentioned the corporate’s three US amenities are nicely positioned to assist elevated native manufacturing. However he warned that rising costs for generic medication may ripple all through the well being care system, impacting affordability for sufferers.
Sudarshan Jain, secretary basic of the Pharmaceutical Alliance of India, mentioned Indian firms have already got a major presence in the US, with greater than 40 amenities supporting employment, manufacturing and analysis. He mentioned India continues to be a dependable companion in offering inexpensive, high-quality medicines to U.S. sufferers.
GTRI added that constructing a completely home drug provide chain in the US would require important funding and would nearly definitely result in increased drug costs.
Pharmexcil Chairman Namit Joshi mentioned the announcement brings welcome readability. “The zero-tariff interval via 2028 offers the trade significant runway and we consider we are able to use this time productively as we proceed to strengthen our place throughout a number of markets relatively than counting on a single market.”
