Meds To Cost More? Trump Now Sets Sights On Pharma, Mostly Supplied By India

India-West News Desk

WASHINGTON, DC – After sparing pharmaceuticals in his earlier trade battles, President Donald Trump is now toying with the sector. On April 8, Trump announced plans to impose a “major” tariff on pharmaceutical imports, a move that could significantly disrupt India’s thriving pharmaceutical industry, which relies heavily on trade with the U.S.

Previously, pharmaceuticals and semiconductors were excluded from his “beautiful” reciprocal tariff policy, but this shift signals a change in his approach.

Speaking at a National Republican Congressional Committee event, Trump explained that the new tariffs would incentivize pharmaceutical companies to relocate operations to the U.S.

The U.S. is by far India’s largest market for pharmaceutical exports. In FY 2024, India exported $8.7 billion worth of pharmaceutical goods to the U.S., making up 31% of its total pharmaceutical exports, which totaled $27.9 billion. India supplies over 45% of the generics and 15% of biosimilars used in the U.S., with major companies like Dr. Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma, and Gland Pharma earning up to 50% of their total revenue from the American market.

Experts warn that the imposition of higher tariffs could have damaging consequences for both the U.S. and India. In the U.S., it could increase production costs for manufacturers, erode price competitiveness, and drive up drug prices. America depends on affordable generics from India, and higher tariffs could lead to inflation, price hikes, and even potential drug shortages. Indian companies, operating on slim margins in the generics space, may struggle to absorb the increased costs, passing them on to U.S. consumers or insurers.

Several Indian pharmaceutical giants are highly reliant on the U.S. market. Sun Pharmaceutical, India’s largest drugmaker, derived 32% of its revenue from the U.S. in 2024, with managing director Dilip Shanghvi acknowledging that the added costs would likely be passed on to consumers. Dr. Reddy’s Laboratories, which sees 47% of its sales from North America, particularly in oncology and immunology generics, stands to lose if tariffs increase. Similarly, Cipla, Biocon, Lupin, Glenmark Pharma, and Zydus all rely heavily on U.S. sales, and these companies could face significant hurdles in maintaining their competitive edge.