India is an emerging player in the copper-based manufacturing of products and is one of the largest producers of generic medicines, exporting the pharma goods to the western markets such as the US.
While the bilateral trade negotiations are in the final stages of discussion between India and the US, the tariffs announced on copper and pharmaceuticals are expected to disrupt the industrial supply chains, in which India aims to become a leader.Read more: Indian Pharma stocks remain resilient to Donald Trump’s 200% tariff threat; Laurus at 52-week high
Trump’s tariffs announcements
The US President declared a 50% tariff on copper imports with effect from August 1, stating that he had a thorough national security assessment.
“Copper is the second most used material by the Department of Defence,” Trump wrote on Truth Social, adding that the metal is used in key areas such as semiconductors, aircraft, ammunition, including hypersonic weapons and missile defence systems.
During a US Cabinet meeting earlier this week, Trump threatened to impose a 200% tariff rate on pharma imports to the country. “There are going to be tariffs at a very high rate, like 200%,” he said, adding that it will not be imposed immediately. “We’ll give them a certain period of time to get their act together. I’ll give people about a year, year-and-a-half.”
The announcements are nothing but a step further in Trump’s protectionist stance which is expanding across multiple sectors and industries.
Why do tariffs matter for India?
India is a key global player in both copper and pharmaceuticals exports. The increased tariff rates could affect Indian companies working in these industries targeting the US markets.
How will the copper tariffs impact?
In the financial year 2024-25, India’s exports of copper and copper products worldwide stood at around $2 billion, with the US accounting for $360 million, roughly 17% of the total, as per Moneycontrol. US ranks India as its third-largest copper export market after Saudi Arabia and China.
Read more: US President Trump proposes up to 200% tariff on imported pharmaceuticals
If Trump’s administration ramps up its own copper mining and starts to stockpile the metal, global supply chains are expected to be shaken up which could drive up prices and manufacturing costs in India.
However, industry leaders suggest that such a measure would affect India negligibly as the country is itself copper-deficient.
“India is a copper-deficient country, and its export, as such, is not significant. Again, of the total exports, the shipments to the US are just around 10,000 tonnes,” Mayur Karmakar, MD of International Copper Association India, was quoted as saying by PTI.
He added that as a result, the proposed duty will not have any impact on the Indian firms, particularly as the domestic demand is extremely buoyant, given India’s thrust on renewable energy, EVs, and a host of other copper-intensive sectors.
Union Minister of Coal and Mines, G Kishan Reddy released a Vision Document for Copper on July 4, which forecasts an increase in demand by six-folds by 2047 and outlined plans to add 5 million tonnes per annum of smelting and refining capacity by 2030.
It added that India remains a net importer of copper products throughout the entire copper value chain. Hence, to meet the growing demand for copper, the country needs to embrace strategic initiatives across the value chain.
Read more: Metals fall as Trump stirs trade uncertainty with BRICS threat
In 2023, India imported 1 million tonnes of copper concentrate, with a significant portion of these imports coming from a handful of countries such as Indonesia, Chile and Peru, as per PTI.
The potential impact on pharma exports
In FY 2023-24, India exported over $8 billion worth of pharmaceutical products to the United States. The figure rose to $9.8 billion in FY25, as per Moneycontrol.
The figures clearly show that US is an important market for Indian drugs and pharma products. If Trump goes ahead with such a large tariff rate of 200%, India’s generic medicine industry will suffer an impact in terms of the price advantage that the companies enjoy presently in the US.
Experts suggest that the industry will have no choice left but to increase the prices of the products, which will ultimately be borne by the consumers in the US.
“It is still an evolving situation. We think that it (tariff) cannot be that much because it would also increase the cost for buyers in the US. In the worst-case scenario, if it happens, then we will have to increase the prices accordingly, we don’t have a choice there as we operate on low margins,” a senior industry executive was quoted as saying by PTI.
Read more: Copper futures gain the most on record after Trump calls for 50% tariff
Indian companies can also experience an impact in their revenues, as per ICRA VP and Sector Head Deepak Jotwani, who says that the US market accounts for 30-40% of the total revenue generated by the Indian pharma firms.
“Imposition of high tariffs by the US administration on pharmaceutical imports could have an adverse impact on the Indian pharma industry as some increase in costs may need to be absorbed by the companies,” he added.
