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0, 100, 200: How Trump's latest generic medicines tariffs could affect India
Indian drugmakers export around $9-10 billion worth of generic medicines to the American market every year.
US President Donald Trump on Wednesday unveiled a phased tariff plan for imported generic medicines, giving manufacturers a two-year window to shift production to the United States before imposing steep import duties that could significantly affect India's pharmaceutical exports.
In a post on Truth Social, Trump said all generic drugs entering the US would continue to face zero tariffs from August 1, 2026, for two years, after which they would attract a 100% tariff from August 2028 and 200% from August 2029. The move is aimed at encouraging pharmaceutical companies to manufacture generic medicines in the US.
What Trump announced
"Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for a two year period of time, after which the TARIFF will be raised to 100% for a one year period of time, and 200% thereafter," Trump wrote.
He said the policy was intended to "RESHORE Generic Pharmaceutical Production into America" by penalising companies that do not build manufacturing plants and equipment in the US during the two-year transition period.
"The objective of this Policy is to protect the people of the United States," Trump added, while noting that the administration's policy on patented, branded and innovative drugs would remain unchanged.
Why India could be hit
India is expected to be among the countries most exposed to the proposed tariff regime.
Often referred to as the "pharmacy of the world", India is the largest supplier of generic medicines to the US. Indian drugmakers export around $9-10 billion worth of generic medicines to the American market every year, accounting for nearly 40% of all generic medicines used in the US.
According to India's commerce ministry, pharmaceutical exports to the US stood at $10.5 billion in 2024-25, making medicines one of India's top export categories to America.
A Global Trade Research Initiative (GTRI) report also estimated that India exported $9.7 billion worth of pharmaceuticals to the US in 2025, accounting for 38% of its global pharmaceutical exports.
Indian-made generic medicines are widely prescribed in the US for treating hypertension, diabetes, cancer, infectious diseases and mental health conditions.
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What the tariff timeline means
- August 1, 2026-August 2028: Zero tariff on imported generic medicines.
- August 2028-August 2029: Imports face a 100% tariff.
- From August 2029 onwards: Tariff doubles to 200%.
The transition period appears designed to encourage companies to relocate manufacturing to the US before the higher duties take effect.
Why generic drugmakers face a bigger challenge
Unlike manufacturers of patented medicines, generic drug companies operate on thin margins and depend heavily on global manufacturing networks to keep costs low.
That makes it significantly harder for them to absorb tariffs or rapidly move production facilities to the US.
Major global generic drugmakers such as Sandoz, Teva Pharmaceutical Industries and Viatris manufacture a substantial portion of their products outside the United States. Sandoz chief executive Richard Saynor had earlier warned that steep US tariffs on generic medicines could increase drug prices and reduce access for patients.
Will Indian companies get an exemption?
It remains unclear how Trump's latest announcement will apply to Indian exporters.
India and the US had agreed in February to pursue "negotiated outcomes" on generic pharmaceuticals and pharmaceutical ingredients as part of their broader trade discussions. Whether those negotiations result in exemptions or lower tariffs for Indian manufacturers is yet to be known.
Trump's push for domestic manufacturing
The latest announcement is part of Trump's broader effort to bring pharmaceutical manufacturing back to the US.
His administration has repeatedly argued that America should reduce its dependence on overseas drug production. In 2025, it launched a Section 232 national security investigation into pharmaceutical imports and has since pressed drugmakers to expand manufacturing within the US.
While several makers of patented medicines have announced fresh investments in American manufacturing, the new tariff roadmap places generic drug manufacturers under greater pressure to follow suit or risk facing punitive import duties from 2028.
