Indian pharma exporters are expected to face minimal impact from the US decision to impose a 100% tariff on patented medicines, as the country’s $30 billion-plus pharmaceutical exports are largely driven by generics. India shipped $10.5 billion worth of drugs to the US in FY25, accounting for nearly 40% of America’s generic prescriptions.
According to Aditya Jhaver, director at Crisil Ratings, the replacement risk for Indian generics in the US remains low, given the country’s limited local manufacturing capacity. “India delivers significant healthcare savings to the US, with manufacturing costs 35-40% lower than those in the US,” he said.
Mankind Pharma chairman Ramesh C Juneja noted that the tariff is likely to have less than a 0.5% impact on Indian exporters. “There are very few companies that send patented products to the US, and most of them already have manufacturing facilities in America,” he added.
Still, exporters cautioned that India must remain alert in case complex generics, or even parts of the generic supply chain, come under tariffs or other restrictions in the future. The US Commerce Department is also probing under Section 232 whether pharmaceutical imports—including finished drugs and APIs—pose a national security risk.
Despite a more stringent regulatory regime, Indian drug exports to the US rose 17% in FY25. But experts warned that India’s ambition to “move up the value chain” into higher-end patented drugs, biologics, and specialty therapies could be disproportionately hit if Washington’s tariff stance hardens.
“The FDA has increased surprise inspections at overseas plants after finding compliance gaps at multiple Indian and Chinese facilities. This has raised compliance costs and the risk of supply disruptions,” said Harish Jain, director at Embiotic Laboratories. “But India’s cost leadership in generics still provides a buffer against near-term tariff shocks.”
Pharmexcil CoA member Nipun Jain said India must reinforce its advantage in low-cost bulk drugs and APIs, while simultaneously investing in next-generation segments such as complex generics, peptides, biosimilars, and CAR-T therapies.
US President Donald Trump announced via Truth Social early Friday that from October 1, 2025, the country will impose a 100% tariff on all branded or patented drugs unless they are manufactured domestically. The announcement weighed heavily on pharma stocks. Shares of Sun Pharmaceutical and Natco Pharma fell over 3% each, while Laurus Labs, Biocon, and Zydus Lifesciences dropped 4-7%. The Nifty Pharma index ended the day down 2.14% and 5.2% lower for the week, with Sun Pharma posting the highest trading volumes, slipping 2.6%.