We’ll be dropping drug prices. It will start over the next 2 to 3 months at 1,200, 1,300. And even 1,400%, and 1,500%, but not just 50% or 25%, which normally would be a lot because the rest of the world pays much less for the identical drug.”
Also Read: Trump threatens higher tariffs on India for buying Russian Oil in latest social media postAt present, India enjoys zero tariffs on the export of generic drugs to the United States. However, if the proposed 25% tariff is extended to the pharmaceutical sector, it could force Indian drugmakers to rethink their strategies.
One possible response would be to pass on most or all of the added cost to consumers, which would drive up the prices of generic medicines in the US. Another option would be to reassess product portfolios and discontinue lines that become unviable under the new tariff regime. While setting up manufacturing facilities in the US could be considered, it is unlikely to offer any cost advantage in the case of low-margin generic drugs.
Large Indian firms focused on unbranded generics—such as Sun Pharma, Dr. Reddy’s Laboratories, Divi’s Laboratories, Cipla, Aurobindo Pharma, Lupin and Biocon—could face margin pressure if tariffs come into play.Also Read: It’s frustration, not strategy: Experts react to Trump’s harsh stand on India
In contrast, companies that cater primarily to the domestic market may be better placed. Firms like Eris Lifesciences, Ajanta Pharma and Torrent Pharma, along with hospital chains such as Apollo Hospitals, Fortis Healthcare, Shalby and Aster DM, are less exposed to export volatility.
Profits for Indian pharmaceutical firms may decline, and research and development may stagnate. The US market, heavily reliant on India for Active Pharmaceutical Ingredients (APIs) and low-cost generics, faces a daunting challenge in finding alternative sources that can match the scale, quality, and affordability that India offers.
In FY24-25, India exported $9.8 billion worth of pharmaceuticals to the US, up from $8 billion the previous year. Any move to impose tariffs—particularly at the scale of 200% that has been floated—would hit pharma companies.
If duties are introduced, prices may have to be adjusted upwards, affecting the affordability of generic drugs in the US. Industry sources say this could dent the price advantage Indian manufacturers currently enjoy and may eventually affect market share in their most important export destination.
Also Read: Over half of Indian exports to US unaffected by new tariffs: Sources
